Exxon’s 6th oil project will eat away at skilled labour from local businesses - Impact Assessment Report reveals

Exxon’s 6th oil project will eat away at skilled labour from local businesses – Impact Assessment Report reveals

Apr 18, 2024 ExxonMobil, News, Oil & Gas

– drive up food prices in markets

Kaieteur News – The Guyana Government recently signed off on a sixth project for the ExxonMobil-led consortium operating in the Stabroek Block, but its expanded production poses a risk not only to the availability of skills for the domestic labour force, but potentially an increased cost of living for citizens. This much is documented in the Environmental Impact Assessment (EIA), that was submitted to the Environmental Protection Agency (EPA), as part of the approval process.

In that document, it outlines that with the US$12.7B Whiptail Development Project, there will in fact be no direct impact on the country’s administrative divisions, population distribution, or education systems, socioeconomic conditions, employment, and livelihoods.

Further it said that “area for work will be small and thus will not result in any change in the overall population distribution.” What in fact is projected, is a potential increase in the prices for goods and services on the domestic market, meaning an even steeper increase in cost of living.

According to the ExxonMobil Guyana study, with the new project, there is “Potential increased cost of living to citizens due to higher demand for goods and services.”

With the coming on board of the sixth project, it would mean the oil companies would increase its demand of goods and services locally, and with a dwindled supply—as a result of Whiptail and its related activities—the price for goods and services left available for the domestic economy, will inevitably skyrocket.

Expounding on its rationale for its conclusion, the EIA notes “The Project’s potential for adverse impacts on socioeconomic conditions, employment, and livelihood include a potential increased cost of living and competition among local businesses for qualified workers due to local hiring and spending associated with the Project.” Meaning the domestic sector will lose more of its skilled employees to the oil sector with the expanding of ExxonMobil’s operations offshore Guyana. As such, according to ExxonMobil, it would be up to the government, through Project-related revenue generation and increased tax revenues for the government, to potentially increase spending on social services and infrastructure.

As is customary, the company did share that the Project is also expected to generate positive impacts through contributions to the gross domestic product as a result of the Production Sharing Agreement, as well as through revenues from the local procurement of goods, wages paid to Guyanese employees of ExxonMobil Guyana, spending in local communities by the company, and tax revenues on local spending. ExxonMobil expects the Whiptail project to require an investment worth $12.7 billion. The project is anticipated to yield 250,000 barrels per day (bpd) of oil by the close of 2027. This development is expected to elevate Guyana’s total daily crude capacity to a staggering 1.3 million bpd, just eight years after the onset of oil production in the country.

The Whiptail project includes the establishment of up to 10 drill centers with 48 production and injection wells. Located in the southeastern portion of the Stabroek block, the project is expected to tap into the Whiptail, Pinktail and Tilapia fields, with the potential for additional resources pending feasibility studies.

businesses, Exxon, Impact Assessment Report, Labour, reveals

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