Exxon to buy own fleet of SUVs with Guyana’s oil

Mar 27, 2023 News

---

…as Jagdeo boasts of Local Content Law at Babu Jaan
…local transportation providers on their way out

Kaieteur News – To support its local operations in Guyana, ExxonMobil through its subsidiary Esso Exploration and Production Guyana Limited (EEPGL) is looking to acquire its own fleet of vehicles to be used to transport its staff compliment.

Kaieteur News understands that the company is interested in purchasing brand new Sport Utility Vehicles (SUVs) that were manufactured between 2022 and 2023. The expense to purchase these vehicles will be borne by Guyana, as the 2016 Production Sharing Agreement (PSA) allows for such costs to support the local petroleum production activities to be recovered.

In a Request For Information (RFI) issued by EEPGL on March 14, 2023 ExxonMobil explained that it is seeking detailed technical information from suppliers for meeting EEPGL’s bid selection requirements for “provision of Light Motor Vehicles in Georgetown, Guyana.”

The RFI will be used to shortlist candidates that will be invited to submit proposals to the company. It was explained, “Esso Exploration and Production Guyana Limited (EEPGL) plans to put in place a material / equipment acquisition agreement for provision of light motor vehicles within the Georgetown area.” It said it therefore wishes to identify manufacturer authorized suppliers.

As part of the background information that was uploaded to the Ministry of Natural Resources Local Content Register online, the oil giant outlined the specific details of the vehicles it wishes to purchase. The suitable client  “should be a manufacturer authorized dealer and provide manufacturers regular guarantees (to deliver)  brand new vehicles model 2022 / 2023 that meet international code and equipped with advanced safety features.”

It also noted that the vehicles should have an engine capacity range between 1500 to 3000cc. In addition to medium to large SUVs that can seat between five and seven individuals, Exxon is also looking to acquire small or large busses that can seat 14 to 32 people.

According to the RFI, “Vehicles should be equipped with low anchor/top tethers support the use of child seat(s); Suppliers should have established supply chain; vehicles should be in country or on order; Suppliers should offer after sale services for both routine and non-routine repairs; Suppliers must have Certified Technicians and Supplier should be able to conduct routine and non-routine repairs within 30 days of initial request by EEPGL.”

Though this move has already been criticized as an avenue to phase out the local transportation providers, the oil company in the said document highlights, “EEPGL’s local content strategy is important to our business. Its elements are integrated into our daily processes and procedures and guide the way we work today and plan for tomorrow.” This as the company to supply the vehicles will have to submit its local content strategy among other requirements.

Jagdeo boasts of Local Content benefits

Meanwhile, Vice President Bharrat Jagdeo during remarks at a ceremony held to pay tribute to the lives of Former Presidents Dr. Cheddi Jagan and his wife, Janet Jagan, at Babu John, Berbice on Sunday boasted of the accomplishments made by the People’s Progressive Party in the petroleum sector, especially as it regards Local Content.

The Law was passed by the administration in December 2019 to ensure Guyanese benefits from the burgeoning industry. The VP seemed unaware of the moves being made by the oil company, under his remit, as he told hundreds gathered at the event that the former Head of State was concerned about this state of affairs. He said, “We have made changes to the Local Content Legislation; the same legislation- something that comrade Cheddi was always concerned about- that we needed foreign capital to expand this country but are Guyanese going to get a fair share of the proceeds.”

Jagdeo pointed out that the government has already drafted a new Production Sharing Agreement (PSA) that would ensure greater fiscal arrangements for the country, improved compared to the contract signed by the former Coalition government; but more importantly he said, is the passage of the new legislation. The Vice President shared that Guyana has since benefitted from nearly US$700 million worth of revenue from the Local Content Act, inserting the government’s position that “that this industry must work for our people too, not the foreigners alone.”

Jagdeo went on to explain, “We have travelled around the world, we have seen in these countries how the foreigners, people of one colour live in ethnic enclaves, we said not in Guyana. The law now says that these foreign companies can only rent dwelling places from Guyanese so that Guyanese now have an opportunity to supply them with this too.”

Notably, he also pointed out, “They can only rent transportation.” The former President said while in Opposition the party visited the Marriott Hotel in Georgetown and observed that an American company was in the country to provide transportation services. As such he said, “So we changed the Law and now you can only rent from Guyanese people because it comes out of the sense of where we have come from. We need foreign capital to develop these industries. We can’t put together $13 billion to build these FPSOs we don’t have that money but we have to make sure that the people in this industry leave a fair share of the proceeds to Guyanese.”

No benefits for Guyanese

In the meantime, Businessman and Publisher of the Kaieteur News, Mr. Glenn Lall upon learning of the situation said Jagdeo must explain how Local Content will indeed be of benefit to citizens when the oil company is now attempting to shut out transportation providers.  Lall said, “the same day Jagdeo talking about Local Content and its benefits to Guyana, including the rental of homes and transportation services, ExxonMobil has put out an ad to purchase its own vehicles. Is that Local Content? Tell us VP.”

The newspaper Publisher explained that ExxonMobil is phasing out locals to own their own vehicles which will be paid for with the nation’s oil. “What Exxon is doing is phasing out the local people, many of whom took loans from the banks to purchase vehicles to earn a dollar through transportation in the oil industry. These new vehicles are being bought to fetch their children to and from school and to do their errands here, there and everywhere. They will be using free gas, and using our money to maintain their vehicles,” he contended.

The businessman who has been a strong advocate for a better oil deal believes this is yet another move to starve Guyanese of their own wealth. He noted that Exxon is in the process of constructing a new local Headquarter at Ogle, East Coast Demerara which will remove the need to rent local office space. Lall also pointed out that Exxon is even seeking to build their own housing schemes to further disturb Guyanese from benefitting from any low hanging fruit in the oil sector. As such, the businessman said, “All that Jagdeo is boasting of is froth.”

 

 

 

 

 

 

 

---

• Dr. Cheddi Jagan, East Coast Demerara, EEPGL, foreigners, Guyana Limited, PSA

---