As the government eyes shorter payment periods for locals providing services particularly in the oil and gas sector, ExxonMobil Guyana President Alistair Routledge has given assurances that the company is trying to make disbursements easier and faster.
Routledge, during an engagement with reporters on Tuesday, said the company is aware of challenges faced by locals when seeking to access financing.
Because of that, he highlighted that ExxonMobil is working with contractors to guarantee that the period between delivery of a service and submitting an invoice for work done is shortened since that influences the payment period.
The company is also exploring invoice factoring with financial institutions. In simple terms, this involves the “selling” of some or all of your company’s outstanding invoices to a third party as a way of improving your cash flow and revenue stability. Under this arrangement, the factoring company will pay the company with the invoice most of the invoiced amount immediately, then collect payment directly from the customer.
“We do see it very important that companies have that cash flow that keeps them running today, giving them that finance today… and also giving them that opportunity so that they have the finance to grow,” Routledge said.
He also noted that ExxonMobil continues to work with the Local Content Secretariat and local businesses to workaround any financial challenges.
Earlier this month, at the Local Content Summit, President Dr. Irfaan Ali said the government wants oil companies to pay contractors in less than 45 days upon the receipt of a correct invoice.
Protracted payment periods have been a concern of many local companies. In 2022, the government instructed companies to pay locals within 45 days. Before that, payments could take up to 90 days.
