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Kaieteur News would want the Government to take control of the procurement decisions of ExxonMobil

Aug 01, 2024 Letters

Dear Editor,

A curious narrative was spun by the Kaieteur News lead article on July 30, headlined ‘Mozambique demands oil companies provide salaries, contract sums to Govt. – while Jagdeo says Guyana has no say in award of contracts by ExxonM’.

The newspaper reported that Mozambique can receive reports from oil companies related to procurement of services and employed persons. It explained, among other things, that Mozambique requires companies to contribute to training of its nationals, and to submit reports on the nationalities of the companies it contracts. Kaieteur News also reported that Mozambique mandates quotas for the hiring of its nationals to the companies’ workforce.

Conveniently, Kaieteur News opted not to note that Guyana has a similar framework. Guyana’s Local Content Act gave effect to the establishment of a Local Content Secretariat, which receives periodic reports about oil companies’ plans to procure, hire and train Guyanese talent, as well as post-implementation reports. The Secretariat is a regulator of local content. It ensures adherence to the Act, which sets aside quotas for hiring of Guyanese nationals to certified companies, and procurement of goods and services from Guyanese companies. Further, the Petroleum Agreements Guyana signs with oil companies, require that they contribute a fixed amount annually to a training fund for Guyanese nationals.

Over the years, Kaieteur News has reported on these matters, covering local content earnings and successes extensively. It therefore begs the question, whether the newspaper mischievously pretends not to know information critical to the context of the article, to create a false impression of the local State of affairs. Was the article written by an ignorant reporter, and reviewed by editors not informed enough themselves to do their due diligence?

The newspaper went on to state that, “However… [Vice President] Dr. Bharrat Jagdeo has said that the Government has no say in Exxon’s awards of contracts or the spending of oil companies in the sector.” This is a futile attempt by Kaieteur News to tarnish the work of Vice President Jagdeo and to present a dichotomy between Guyana and Mozambique, with respect to the management of their respective oil and gas sectors. As explained above and conveniently forgotten by Kaieteur News, Guyana has a local content framework which, in addition to facilitating the furnishing of the Government with regular reports, has secured over US$1 billion for Guyanese companies since the Act was signed into law by President Irfaan Ali.

However, the Government cannot go into a company’s procurement department and dictate its day-to-day affairs. That Kaieteur News would want the Government to take control of the procurement decisions of ExxonMobil, a private company, should alarm every business owner. Guyana receives profit oil and royalty because the company is developing Guyana’s resources. However, Guyana does not have a participating interest in the Stabroek Block. Therefore, it cannot commandeer ExxonMobil’s procurement and spending decisions. Not to mention, the government has done so much to strengthen the legal framework with the Petroleum Activities Act. The fiscal framework is also enhanced by the Natural Resource Fund Act 2021 and the model Petroleum Agreement for the offshore sector.

Kaieteur News does this kind of conveniently forgetful and logically unsound journalism quite a lot. The Guyanese public deserves better.

Yours respectfully,

Ron McPhoy

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