November 19, 2017

Exxon promises to submit Local Content Plan by year-end

– in accordance with 6-month Govt deadline

International oil giant ExxonMobil has indicated its intention to toe the proverbial line and submit its Local Content Plan by December of this year, in accordance with a Government-stipulated deadline.

Natural Resources Minister,
Raphael Trotman

Senior Director of Exxon’s
Public and Government
Affairs, Kimberly Brasington

This document will chronicle all the company plans to do for the individual development of the people of Guyana.
According to the Senior Director of Exxon’s Public and Government Affairs, Kimberly Brasington, the company will be adhering to the deadline and submit its plan exactly six months after being granted its production licence.
Authorities have reviewed the technical and environmental aspects of the Liza Project Development Plan submitted by Exxon affiliate Esso Exploration and Production (Guyana) Ltd in December 2016. Following those reviews, Government had granted the oil giant a formal production licence in June.
“So that’s December (when we are scheduled to submit our plan). We are required to submit our Local Content Plan to the Government six months from the (date of) approval of the production licence,” Brasington explained, adding that the Local Content Plan will focus on development.
Local Content
The Local Content Plan and what it will do for Guyana has been a burning question since it was announced that oil was found in the Stabroek Block. Expectations were initially tempered by statements to the effect that few job opportunities would be created by commercial exploitation of this oil find, but the company has since said it will help with Local Content delivery.
When ExxonMobil was granted a production licence in June of this year, Minister Trotman had given the company a six-month deadline in which to submit its Local Content Plan to the Government.
ExxonMobil’s newly appointed Guyana Country Manager, Rod Henson, had recently announced that the company would be relocating its onshore operations, which were used for support services, from neighbouring Trinidad and Tobago to Guyana.
He had told participants at a meeting it was not the case that ExxonMobil would be looking to build a facility for its support services, but would rather put out tenders, and anyone interested in providing the shore-based services could present a proposal.
Trotman had, in 2016, announced that Cabinet had given its ‘no objection’ to the establishment of the onshore industrial site on Crab Island, in the mouth of the Berbice River. He had said it would be forged through the joint efforts of the ministries of Natural Resources, Public Infrastructure and Business.
Construction was announced for early this year, and the investments from the private sector and Government’s infrastructural work and support were to be equivalent to US$500 million; but the Crab Island facility is yet to materialise.
According to information released in March by the Government’s Department of Public Information (DPI), the construction of an onshore oil-and-gas facility seeks to cater to the expansion of exploration and subsequent production of oil in Guyana.
That report had said Government would be investing US$500 million to construct the onshore facility during the course of this year, and that the facility would serve as a logistics and supply base to the offshore production, creating crucial areas of opportunity for Local Content.
What is happening now is that an onshore facility to service Exxon is being constructed by Guyana Shore Base Incorporated (GYSBI) at Houston, EBD. GYSBI is acting in partnership with Muneshwer’s Limited, Pacific Rim Constructors, Total Tech Oil Field Services, and LED Offshore.
Guyana’s policy
For its part, Guyana has formulated its own draft Local Content Policy, which was seen by this publication.
According to the policy, legislation is likely to be enacted to set out how Guyanese will benefit.
The document also sets out that the policy will be enforced by a regulatory institution that is well-funded and resourced. The regulator, in turn, would be overseen by a multi-stakeholder group representing local bodies that are involved in the sector.
The regulatory agency would also have to report to Parliament, as is customary for most regulators who report to the Public Accounts Committee, or are overseen by the Auditor General and the Social Services Committee.
And if contracts are awarded by the National Procurement and Tender Administration Board (NPTAB), the regulator would also be tasked with ensuring international operators manage their work according to the Local Content strategy. This, it says, will apply from the developmental stage of the project to its operational stage.
The agency’s duties would include monitoring, evaluating, and reporting on the licensing and registration process for all suppliers. It will also be in charge of creating databases for suppliers, local professionals and technicians, as well as projects. It is proposed that the body will also set targets for these projects.