African Export-Import Bank (Afreximbank) has unveiled plans to establish a $1 billion oil service financing facility in Guyana, which aims to enhance local participation in the country’s fast growing oil industry.
The bank will deploy the $1 billion facility directly to qualifying corporate clients or through a factoring line via local banks, enabling them to finance invoices from local contractors.
Highlighting the transformative potential of Guyana’s estimated 12 billion barrels of crude oil reserves, Benedict Oramah, Afreximbank’s President, said that skilled oil service companies from Ghana, Egypt, and South Africa, are "ready and willing to support Guyanese... And of course, Afreximbank is there to underwrite the marriage.”
"Given the level of oil production in Guyana and its offshore location, I estimate that the oil service sector would amount to 5 to 8 billion US dollars annually. But where will it go? Most of it would be paid to oil service companies abroad, if Guyana does nothing to avoid that. A 50% retention in Guyana would increase Guyana's GDP by 29% to 47%,” said Oramah.
As such, he called for robust local content policies that would enable Guyanese entrepreneurs to become significant players in the oil value chain.