–over past seven years more than 3,500 Guyanese supporting onshore, offshore activities

GUYANESE businesses have benefitted immensely from the operations of ExxonMobil, with companies absorbing more than US$600 million (roughly G$125 billion) in expenditures from the oil giant between 2015 and now.

ExxonMobil, in a recent press statement, related that along with its direct contractors, it has expended over US$600 million with more than 880 local suppliers.

Businesses have been servicing the onshore and offshore activities of ExxonMobil, which has so far recorded massive success in the Stabroek Block offshore Guyana.

On the production side, the Liza Phase One project was leading the charge until the Liza Phase Two project came on stream this year, bringing the total production capacity to more than 340,000 barrels per day in only seven years since the country’s first discovery.

According to a release, production at the Liza Unity Floating, Production, Storage and Offloading (FPSO) vessel is expected to reach its target of 220,000 barrels of oil later this year, as operations continue to be brought safely online.

Payara, the third project in the Stabroek Block, is expected to produce approximately 220,000 barrels of oil per day, using the Prosperity FPSO vessel, which is currently under construction.

Further, the largest project in the Stabroek Block offshore Guyana, ExxonMobil’s US$10 billion Yellowtail project, which was sanctioned recently by the government, is expected to produce up to 250,000 barrels of oil per day after startup in late 2025, using the “One Guyana” Floating Production, Storage and Offloading (FPSO) vessel.

It will target an estimated resource base of about 900 million oil-equivalent barrels and include six drill centres and up to 26 production and 25 injection wells.

As it is now, the Stabroek Block’s recoverable resource base is estimated at more than 10 billion oil-equivalent barrels. And the current resource has the potential to support up to 10 projects.

“Development of projects and continued exploration success offshore are enabling the steady advancement of Guyanese capabilities and enhanced economic growth,” ExxonMobil said recently.

Already, more than 3,500 Guyanese are supporting ExxonMobil’s activities in Guyana, an increase of more than 50 per cent since 2019.

In an effort to ensure that local participation in the oil and gas sector increases and advances, the government introduced local content legislation this year. This paved the way for the creation of a Local Content Secretariat which governs a Local Content Registry.

It was reported, recently, that companies have started positioning themselves to benefit from the plethora of opportunities by accessing the Local Content Registry.

The register being accessed by companies is one of two, with the other catering to individuals who are seeking employment in the oil and gas sector.

As outlined by various authorities, the registers will be used as a way to bring together local expertise, human capital and businesses, including those operating in the oil and gas sector. The registers are currently available and accessible online via the Ministry of Natural Resources’ website.

The creation of those registers was possible because of the historic enactment of the Local Content Act in December 2021.

The new law earmarks 40 sectors or services and stipulates a minimum percentage of the total value of expenditure on those services that oil companies and their sub-contractors must procure from Guyanese suppliers.

In doing so, the Act provides an enabling framework for the development and expansion of Guyanese companies and, most importantly, business and job opportunities for Guyanese nationals
“When we were considering the Local Content Act, one of the recurring issues that arose was the question of ensuring that Guyanese businesses are not in a disadvantageous position relative to their international counterparts in competing for contracts with the oil and gas sector.

“This could arise, for example, where the sector is procuring a service and the international companies tendering to supply that service enjoy a particular tax treatment on the importation of their capital equipment to provide that service that Guyanese companies might not enjoy,” Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh, said during his presentation of Budget 2022 to the National Assembly on January 26.

MINIMISE DISPARITIES
He went on to say that, in the interest of ensuring that Guyanese businesses could compete successfully under the new local content framework, the government will take steps wherever practicable to minimise disparities arising from the tax system that will disadvantage Guyanese businesses.

This will help improve the competitiveness of Guyanese companies, help secure business opportunities for them, and thereby create jobs for Guyanese nationals.

Guyana’s Minister of Natural Resources, Vickram Bharrat, had said that the new local content legislation was finalised after extensive consultations with civil society, the private sector, as well as the oil and gas companies operating in Guyana.

“This legislation is a way of moving our developmental agenda forward,” Minister Bharrat said, adding: “We believe that Guyanese must benefit from this new sector. We might not have the knowledge and requisite skills now, but I am sure that, in years to come, and with the programmes that the government is putting in place, both in the human resource capacity as well as the capacity in our local private sector to ensure that they place a meaningful role in the oil and gas sector and bring true benefits to Guyanese and Guyanese businesses.”

To advance further consultations and discussions on better conditions for Guyanese and businesses the PSC has established a Local Content Advisory Group, chaired by Shyam Nokta.

Other members of the group are Chairman of the PSC, Paul Cheong; President of the Georgetown Chamber of Commerce and Industry (GCCI), Timothy Tucker; Executive Director of GCCI, Richard Rambarran; Chairman of the American Chamber of Commerce (AmCham)’s Local Content Committee, Joel Bhagwandin and Director at AmCham and Women in Oil and Gas, Dr. Mellissa Varswyk.

The advisory group, according to the PSC, will coordinate and advance the local content efforts of the PSC and its member organisations and businesses.