Addressing concerns recently raised by President, Dr. Irfaan Ali regarding the 45-day payment period oil companies must comply with when engaging locals, Alistair Routledge, President of ExxonMobil Guyana, emphasized his company’s commitment to supporting Guyanese in accessing finance and streamlining payment processes.
During Local Content Summit held last month at the Pegasus Hotel, President Ali expressed concerns over the 45-day payment period for oil companies to settle invoices with local contractors, deeming it too lengthy. Promising a review of the country’s local content framework, President Ali underscored the necessity for shorter payment periods to better support local businesses in Guyana’s burgeoning oil sector.
During a recent press conference, Routledge acknowledged the challenges faced by local businesses in the oil and gas sector, particularly in accessing finance as they deal with the 45-day waiting period for payments after invoicing.
“We’re always looking at the payment terms with with the companies we work closely with. I mean the first thing is the duration of that payment obligation,” Routledge noted.
He highlighted ongoing collaborations with the Local Content Secretariat to enhance access to finance for local companies, underscoring the importance of ensuring prompt payments to support their operations and growth.
“We’re very aware that access to finance is a challenge for local businesses and we are working very hard with the local businesses (and) with the local content Secretariat to find ways to enhance that access to finance,” he added.
Routledge also outlined initiatives aimed at shortening the timeframe between service delivery and invoice submission, ensuring quicker realization of revenues for local companies. He mentioned efforts to work closely with companies to streamline payment processes and facilitate prompt invoice submission.
In addition to these efforts, Routledge mentioned ongoing initiatives such as factoring of invoices in collaboration with financial institutions, providing alternative means for companies to access funds expeditiously.
“So it gives companies another way so even if they have (a) 30 days payment (wait), but they would like the money on—you know as soon as the invoice—a valid invoice is submitted, they can do that with this additional step,” he asserted.
Moreover, Routledge emphasized the significance of timely payments in enabling companies to meet operational expenses and invest in their businesses within the oil and gas sector.
