Dec 21, 2020 News
Kaieteur News – ExxonMobil Guyana has yet again made unverified claims using block figures in its local content public relations campaign. In celebrating its one year anniversary producing oil at the Liza Phase One project, the company said “Investment in the local economy continues to increase as the Liza Phase Two and Payara projects advance. More than 2,100 Guyanese are now supporting activities on and offshore. ExxonMobil and its key contractors have spent over GY $69 billion with more than 700 local companies since 2015.”
Local content is the value that an extraction project brings to the local, regional or national economy beyond the resource revenues, according to the Natural Resource Governance Institute (NRGI). The anti-corruption watchdog also maintains that a challenge with local content is that it can open the door for corruption and elite capture of an industry. In this regard, corrupt public officials can position themselves to benefit from oil companies’ contracts, and private local companies can partner with oil companies to create a false impression about the contractor’s local content efforts.
Hence, ExxonMobil has been called on, many times, to provide transparent, detailed breakdowns of how the money it claims was spent.
The company has provided no disaggregation of this block figure, like how much of the $69 billion has been spent to pay its Guyanese employees and those of its partners, sub-contractors and affiliates, as opposed to the amount spent to pay local companies for contracted works.
With regard to its employment of locals, the company’s block figures also fail to inform the public about the wage levels of the jobs held by locals. Exxon’s Local Content Advisor, Devon Seeram, said in a video published on the company’s Facebook page in November, that Exxon’s direct workforce is approximately 155 employees, of which 87 are Guyanese. While this represents a majority of the local ExxonMobil workforce, there is no representation of the salaries/wages or the type of employment granted to Guyanese workers, as opposed to those given to employees of other nationalities. Neither is there such a breakdown for the employees of its partners, sub-contractors and affiliates that support its operations.
As for its claim that 700 local companies were contracted since 2015, Exxon does not disaggregate how much was spent per month. Seeram had said in the aforementioned video that the company spent $60 billion as of the first half of 2020, since 2015. This means that the company claims to have spent nearly $9 billion in the latter half of the year. The company has not accompanied this with details on the categories of businesses hired and the amounts paid to those categories.
One submission made by ExxonMobil to the government in 2018 has demonstrated how block figures with no explanation can be misleading. At the time, the company provided a list of “registered companies” to demonstrate its local content commitment in the first quarter of 2018, including names of Dennis Charran, Mokesh Daby, Colin Daniels, Colvin Lockhart, Kembleton Clyne, Kurt Branker, Ramesh Seebarran, Ganesh Ajodha, Gary De Jesus, and Stan Gouveia.
The list had duplicated names, such as accounting firm Ram and McRae, and included names of places such as Bourda Market, Haags Bosch Dumpsite, Shanta’s Roti Shop, Bounty Supermarket, Metro Office and Computer Supplies, Star Party Rentals, Maggie’s Snackette and Catering, Taste of India, Royal Castle Inc., and Java Coffee Bar.
It also listed Guyana Revenue Authority. It is public knowledge that ExxonMobil and its sub-contractors pay no taxes in respect of their petroleum operations. The only monies paid by them would be small fees to obtain licences, or small fines/penalties for breaches.
The company even listed utility companies like Guyana Power and Light (GPL) as part of its local content efforts.
One international local content expert had previously told Kaieteur News, “The number of companies used by ExxonMobil is immaterial. The crux of the matter is ‘the value of the investment’ made by ExxonMobil. They had consequently advised that Guyana’s parliamentarians call on the company to give a detailed breakdown of how many companies benefitted from US$1M, US$500,000, $100,000 and under US$50,000.”
“With that breakdown, you will be able to see if the country is getting chicken feed or real investment… With meaningful investment, the sectors that support the operations of the company would be able to see real expansion and development,” another local content expert had explained.
The Private Sector Commission (PSC) and Guyana Manufacturing and Services Association (GMSA) recently made a joint statement calling for more to be done for local businesses in the oil and gas value chain. The organizations held that, as the sector is poised for growth, oil and gas companies should move away from sole-sourcing to allow locals opportunities to grow.
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