Nation still to see ExxonMobil’s local content reports for 2016 to 2021

Dec 30, 2022 News

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Kaieteur News – Since assuming office, neither President Irfaan Ali nor his Vice President, Dr. Bharrat Jagdeo has ensured the release of ExxonMobil’s local content reports which are submitted to the State on a half yearly and annual and basis.

In fact, it is well over two years 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 as well as the use of indigenous products and services for the period 2016 to 2022.

Article 18 of the 2016 Production Sharing Agreement (PSA), which was signed for the Stabroek Block, 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 utilization 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 People’s Progressive Party Civic (PPP/C) Administration has not outlined details about its engagements with ExxonMobil on this front, especially as it relates to the company’s local content utilization plan for 2021, 2022 or 2023.

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 utilizing 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 made significant steps with the passage of the Local Content Law and the establishment of a regulator in the form of the Local Content Secretariat, industry stakeholders have stressed the need for the administration to keep its focus on releasing timely information to the public on Exxon’s performance. As citizens await verified information from the Local Content Secretariat, ExxonMobil continues to dominate several platforms with its selective local content statistics.

Chatham House Advisor and Trinidadian Energy Strategist, Anthony Paul has said that proper implementation and regulation of companies’ compliance with the law will be critical to Guyana’s ability to claw back value.

During a previous interview, Paul told Kaieteur News that the regulator will be essential to providing citizens with the truth on the extent of goods and services used by oil companies. 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 as well as auditing what is provided to it.

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 cut across 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 or law by having a responsible agency report on measurable outcomes.”

The Advisor said that unless that agency is empowered to effectively undertake its responsibilities and keep citizens informed with independent data, there is no guarantee that the truth will be known about the extent to which Guyanese are benefitting from their resources.

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