The new government in the world's newest oil producer, Guyana, looks to raise the requirement for local content in employment and procurement of goods and services in the offshore oil projects, which could raise those requirements for ExxonMobil, the biggest foreign developer of Guyana's huge oil resources.
After months of election controversy, Guyana's new President Mohamed Irfaan Ali and Vice President Bharrat Jagdeo, who were sworn in earlier this month, demand more from ExxonMobil on the so-called local content.
"We are sticking to our commitment in ensuring that the industry as far as possible, provide opportunities for not only the local private sector but Guyanese as a whole here and in the diaspora, wherever the skillset is," Guyana's President Ali told local media last week.
According to energy analyst David Blackmon, the new local content requirement, whatever it is, should strike a balance between the Guyanese government's requirements and the need to ensure smooth work and tender and hiring for the offshore operators and contractors.
If Guyana fails to balance the local content requirements with the reality of its local skillset and goods and services procurement, it could potentially delay development projects led by foreign oil operators and contractors.
ExxonMobil revised upward its estimate of recoverable resources offshore Guyana by 2 billion barrels of oil equivalent to 8 billion oil-equivalent barrels, as it announced its 16th oil discovery on the Stabroek Block early this year.
The recoverable resource base of 8 billion oil-equivalent barrels includes the fifteen previous discoveries that ExxonMobil and its partners had made offshore Guyana until the end of 2019. The new discovery, at the Uaru well, is just 10 miles northeast of the Liza oilfield, which is already producing oil.
Guyana officially joined the ranks of oil producing nations at the end of December 2019, after Exxon and its partners began oil production offshore the South American country.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More