ExxonMobil’s local content reports remain shrouded in secrecy

Jul 28, 2021 News

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– Despite Ali, Jagdeo’s pledge on transparency

Kaieteur News – President, Mohammed Irfaan Ali, and Vice President, Dr. Bharrat Jagdeo, have said on several occasions that the PPP/C Administration will ensure the oil and gas industry is enveloped by transparency and accountability. Both have also stressed their intention to see ExxonMobil make maximum use of local goods and services while ensuring the transfer of knowledge.

But since assuming office, neither has ensured the release of ExxonMobil’s local content reports which are submitted to the State on an annual and half-yearly basis. In fact, August 2 will make one year since the Ali government has been in office and the public is none the wiser about the oil giant’s true performance on hiring and training locals and using indigenous products and services for the period 2016 to 2021.
According to the 2016 Production Sharing Agreement (PSA) that was signed for the Stabroek Block, Article 18 speaks to the use of Guyanese Resources. It specifically states, “Within 60 days prior to the beginning of each year or part thereof as applicable, the Contractor and the Minister shall provide a yearly plan for the utilisation of qualified Guyanese resources for the upcoming year. Following the submission of the plan, the Contractor and the Minister shall meet to discuss and consider the effectiveness of the plan.” Since being in office, the PPP/C Administration has said nothing about its engagements with ExxonMobil on this front, especially as it relates to the local content utilisation plan for 2021.
Article 18 goes on to state, “The Contractor shall provide half-yearly reports submitted within 30 days after the end of each half-year to the Minister outlining its achievements in utilising qualified Guyanese resources during the previous half-year and make appropriate adjustments to the yearly plan to better accomplish the goal of increasing the qualified resources available for use by the Contractor in its Petroleum Operations and other entities performing petroleum operations in Guyana.”
To date, neither the Head of State nor the Vice President has disclosed these reports for the public to peruse and hold the oil companies accountable. Neither has also informed the nation about whether they reviewed previous local content reports submitted by Exxon and partners and whether those were satisfactory and in keeping with the PSA’s call for increased use of Guyanese services and skills.
LOCAL CONTENT REGULATOR
While the government has said it is putting in place, the relevant laws and policies to ensure maximum local content is achieved, Chatham House Advisor, Anthony Paul, has warned that without proper implementation and regulation, it would all be for nothing.
During a previous interview, Paul told Kaieteur News that a regulatory body must be in place to ensure there is substantial use of local goods and services. He further noted that there are different models which can be used to achieve this. The Chatham House Advisor said that in Ghana, by regulations, the Petroleum Commission is the responsible regulator. He said that the Petroleum Commission has instituted guidelines and procedures for reporting.
He noted that the regulations include targets which are to be achieved. He also revealed that the Commission has a dedicated local content team and work systems that cross different departments.
In the case of Nigeria, Paul noted that a specific agency, The Nigerian Content Development and Monitoring Board (NCDMB), was established by legislation for managing Nigerian Content. Paul said that the NCDMB has dedicated teams and has been very effective in transforming the local content landscape in Nigeria.
Closer to home, Paul said that the Ministry of Energy and Energy Industries (MEEI) in Trinidad and Tobago is responsible for all aspects of regulating the industry, other than fiscal and environmental.
Paul said that Trinidad and Tobago has some strong regulations requiring local capacity development and local content and for reporting and monitoring performance, but these have not always been robustly applied.
He said that the MEEI does not have dedicated Local Content Personnel, but it has established a multi-stakeholder Permanent Local Content Committee, to oversee implementation of its 2004 Local Content Policy which is aligned with the provisions of the Petroleum Regulations.
The Oil and Gas expert said, “There is an old saying, ‘what gets measured, gets done.’ So it makes sense that Guyanese are made aware of the progress of the policy by having a responsible agency report on measurable outcomes.”
The Advisor said that unless that agency is somehow empowered to effectively undertake its responsibilities and held accountable to stakeholders, there is no guarantee that monitoring and reporting will be adequately conducted or that the potential benefits will be achieved.

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