ExxonMobil’s affiliate, Esso Exploration and Production Guyana Limited (EEPGL) has warned that the onset of development works for its US$10B Yellowtail Project could place a further strain on the country’s thinly stretched labour force.
This was specifically noted in the Environmental Impact Assessment (EIA) for the project.
The report notes that potential adverse impacts of the project on economic conditions could include increased competition for skilled workers and support services. It said this could result from EEPGL and its contractors’ hiring and procurement activities, and could present a potential adverse impact for other companies and sectors that may not be able to pay salaries comparable to those of the oil and gas sector.
With the expansion of job opportunities in the oil and gas sector, EEPGL said in its EIA that it is likely other sectors and the economy overall will need to adjust to wider economic changes, which may include upward pressure on salaries. While this may cause short-term challenges for other sectors, EEPGL said the long-term effects should be positive overall.
Furthermore, the Exxon subsidiary said Guyana is known for having a high level of “brain drain,” whereby a large percentage of the tertiary-educated population emigrates from the country, mostly to Organisation for Economic Co-operation and Development nations.
“Provided that a more robust employment environment can be demonstrated, an increase in high-skilled, high-paying jobs associated with the oil and gas sector should contribute to the attenuation of this phenomenon, creating a larger pool of advanced workers for all areas of the economy,” the oil company stated.
It noted nonetheless that its ongoing capacity-building and training initiatives will remain attentive to the need to foster a more qualified workforce and to enhancing the capacity of local suppliers to serve a larger and more diverse clientele, rather than focusing only on the immediate needs of the oil and gas sector.
The forewarning by ExxonMobil is not particularly an unexpected one since the pressures from the emergence of the oil sector on the country’s labour force are being felt now. Just one week ago, Guyana Standard reported President Irfaan Ali’s revelation that his government’s infrastructure programme for 2022 is under threat due to contractors’ inability to find workers.
A 2021 Report that was published by the International Organization for Migration (IOM) also highlighted the position Guyana finds itself in with 10 billion barrels of oil resources to manage and develop on one hand and very little human resources to do so on the other.
The report noted that Guyana’s population has remained relatively constant over the past 20 years, fluctuating around a mean of approximately 750,000. Those in the population who are of working age are approximately 275,000, with the available labour force being much smaller.
It goes on to state that Guyana has the second lowest labour force participation rate, in the region, at approximately 60.4 per cent in 2020. “If Guyana were to harness all of its unemployed, underemployed and discouraged workers, the potential supply of labour would be only 63,500 the medium-term.” The report estimates that Guyana will need approximately 160,000 workers to proper meeting all of the development activities associated with the emergence of the oil sector.
“It can be concluded that there will be the need for, at minimum, 100,000 workers in Guyana to realize its full growth potential,” the report added while recommending that Guyana needs to urgently consider a structured migration policy, informed by evidence-based analysis.
