Esso Exploration and Production Guyana Limited (EEPGL), ExxonMobil’s local subsidiary, has enough cash in local bank accounts and through arrangements abroad to enable the company to satisfy all payments within the locally-required timeframe.
This is according to EEPGL Vice President and Business Services Manager, Phillip Rietema, who spoke to reporters on Wednesday during a media engagement.
Ahead of that engagement, the company released its financial statements for the year ending on December 31, 2022 and based on those financial statements, the company had about GY$126 billion in current assets and GY$341 billion in current liabilities.
Further, the company’s cash and cash equivalents (simply, the amount of funds in local bank accounts) totalled GY$3.1 billion while its accounts payable stood at GY$148.7 billion.
Based on the current assets and liabilities, EEPGL had a current ratio of about 0.37, a figure that describes the company’s liquidity. And essentially, this signals that the company doesn’t have enough liquid assets to cover its short-term liabilities.
Rietema, however, said that’s not the case.
“We have plenty (of) cash in hand. We have the cash we need in the bank account.
“The way we set it up is that we bring cash into the country to make payments as needed and we ensure all the payments are made on time.
“While the statement would suggest we have relatively small cash in country, we have access to sufficient financial resources from our global affiliates to make all the payments,” Rietema told reporters on Wednesday.
With this arrangement, Rietema posited that the company is able to honour payments within the 30 to 45 day period mandated by the Government of Guyana.
In what was seen as a win for local suppliers, this payment timeframe was instituted by the government last year after those suppliers complained of lengthy waiting times for payments.
Still, the EEPGL is also enjoying interest-free credit from local suppliers for up to 60 days.
Aside from Rietema’s comments, ExxonMobil Guyana’s 2022 Annual Report stated that more than 1,500 unique Guyanese vendors have benefitted from opportunities within EEPGL’s supply chain.
The report also noted that EEPGL and its contractors spent over GY$80 billion with Guyanese suppliers in 2022. Since the first discovery of oil in 2015, EEPGL and its contractors reportedly spent over GY$180 billion with Guyanese suppliers.