Mozambique requires oil companies to pay wages and contract amounts to the government.

Mozambique requires oil companies to pay wages and contract amounts to the government.

July 30, 2024
information

Dr. Bharat Jagdeo, Vice President

– Jagdeo said Guyana had no say in the awarding of contracts by ExxonMobil

Kaieteur News – The Mozambican government requires oil companies operating there to provide information on employee salaries and the value of contracts for the provision of goods and services.

However, despite Guyana having a 50/50 profit-sharing agreement with oil giant ExxonMobil, the country’s chief decision-maker for the oil and gas industry, Bharrat Jagdeo, said the government had no say in the awarding of contracts to ExxonMobil or the oil company’s spending in the sector. He had directed journalists to ExxonMobil to explain its spending.

On Friday (last Friday), 360mozambique.com reported that the new regulations mainly apply to foreign concessionaires operating in the oil and gas sector of the African country, according to Lusa news agency. Mozambique has the third largest natural gas field in Africa, with current estimated reserves of up to 180 billion cubic feet.

“The main objectives are to ensure citizens’ access to employment opportunities, promote the training of workers and companies through national and international cooperation, and ensure the participation of local suppliers in the contracting of goods and services,” the document seen by Lusa states.

In addition, oil companies must submit the necessary documents to the National Petroleum Institute (INP) to certify the number of employees, a list of employees, and must also specify data such as origin, gender, and must include people with disabilities. It should also include a salary table for each position of the employee and the corresponding allowances.

For the contracting of goods and services, companies must provide information on the nationality of the contracting company, ensure compliance with the right of first refusal, and submit documentation supporting the tenders and quotations of all participating suppliers.

“The main aim is to ensure citizens’ access to employment opportunities, promote the training of workers and companies through national and international cooperation, and ensure the participation of local suppliers in the procurement of goods and services”.

In terms of workforce composition, the law requires companies to ensure that local labor accounts for at least 25% of senior positions, and the remaining 85% must be in technical positions. If no locals are qualified to do the job, then the company will be allowed to hire foreigners as long as the company proves that it is unable to recruit local workers.

In addition, the law requires franchisees to provide training grants, which must include at least “1,200 hours of technical vocational training and 600 hours of vocational training, as well as higher education opportunities. During the research and development and production period, the company must ensure that training scholarships are awarded in educational institutions in Mozambique and abroad, with the aim of training Mozambicans in various fields such as higher education, technical vocational courses and vocational training.”

It was previously reported that ExxonMobil had signed contracts with several companies with a corrupt background to provide goods and services to the industry. When the newspaper asked the Vice President to explain why the government did not prevent the award of these contracts to these companies, he said: “As I said before, there is no joint management,” he told reporters Kaieteur News He should press ExxonMobil to explain why it chose to do business with such a company.

Jagdeo noted that if foreign companies meet the benchmark price, then the government will not object, but, “if there is any incestuous relationship between ExxonMobil and foreign companies, if that incestuous relationship leads to price hikes that are unfairly added to our cost bank, then we are worried, so auditors have to guard against that technically.”

Jagdeo noted that the provisions of the 2016 Production Sharing Agreement (PSA) allow the country to verify the costs incurred by the Stabroek block operator through an audit process. “That is the purpose of the audit, so when they raise a query, they send it to ExxonMobil and ExxonMobil has to explain why this screw was procured at this cost, when the benchmark price, the price elsewhere is $3,” the Vice President noted.

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