Negative outcomes can be obtain from unrealistic local content targets: ExxonMobil

Guyana: Under rising scrutiny over businesses that continue to benefit from a hugely unbalanced 2016 Production Sharing Agreement (PSA), ExxonMobil on Thursday recommended that “unrealistic” local content objectives could have harmful impacts.

The regime’s plan for the local content bill has been seen as one way of rebalancing the computations.

In an announcement, ExxonMobil revealed that at the end of 2020, the total Guyanese workforce strengthening ExxonMobil Guyana’s overall exercises was more than 2,300. Since the year 2015, more than GY$77.6 billion has been paid with more than 800 Guyanese firms for goods and services, starting from food to engineering.

Critics of the PSA stated that Exxon and its respective tier contractors have to urgently train more Guyanese people to take up specialized positions within the oil and gas trade.

ExxonMobil Guyana said it had made its submission to the authority on the draft local content policy, restating its commitment to efficient initiatives to build a globally competing workforce and equipment base in its statement on Thursday.

A written resignation was made after the appointment with officials from the Ministry of Natural Resources recently.

“We are dedicated to growing local content that will create broad and sustainable economic improvement while supporting safe growth of the nation’s oil and gas supplies,” stated ExxonMobil Guyana President Alistair Routledge in the announcement.

“We are gratified that the administration continues to seek broad input and collaboration to promote an approach suited to Guyana’s unique circumstances and national growth objectives.

“Local content policy or bill should be acquainted and supported by relevant economic, labour and technical baseline studies…It is vital that when driving local content in one sector, the actual and projected national range is taken into consideration to avoid negatively impacting other divisions of the marketplace”, Routledge stated.

“Prior background around the globe illustrates that overly aggressive local content controls and mandates can have unintended, contradictory outcomes on the development of plans, industry, and the broader economy,” he suggested.

ExxonMobil Guyana Local Content Advisor Devon Seeram announced that the company works closely with its prime builders to guarantee that they are equally obligated to developing confined content and that their local content strategies are effectively executed.

“Since our initial discovery in 2015, we have made vital progress creating jobs, increasing the number of local suppliers we work with and strengthening our local spending,” Seeram stated. Guyanese businesses and ExxonMobil have built a local content collectively, and we believe that further development is both possible and essential as the oil and gas sector proceeds to grow.”

Click here for more news