Guyana’s Local Content Secretariat is pushing to have local contractors in the oil and gas sector receive payments in 21 days, according to the Director, Dr. Martin Pertab.
Presently, oil companies have up to 45 days after the receipt of a correct invoice to make payment to local suppliers. That timeline has been deemed to be too long by President Irfaan Ali, as concerns are still being raised by local suppliers.
Dr. Pertab, at the Ministry of Natural Resources’ Half Year press briefing on Wednesday, explained that talks are being held with oil companies in Guyana to see this revision instituted.
Prior to the 45-day payment period being implemented by authorities, payments were processed over much longer periods, sometimes running into several months. Local suppliers have long objected to these extended timelines, citing cash flow challenges and access to finance.
ExxonMobil Guyana recently indicated that an option for fast-tracking payments is being looked at. The solution under consideration is the implementation of invoice factoring. This financial mechanism allows businesses to sell their invoices to third-party financial institutions at a discount, thereby obtaining immediate cash flow without incurring additional debt.
Routledge said by collaborating with financial institutions, Exxon can provide companies with an option to access funds as soon as a valid invoice is submitted.
