Hefty fines for oil spills will keep companies in check – Dr. Mangal

Apr 02, 2019 News

By Kiana Wilburg
From all indications, Guyana remains woefully unprepared for addressing an oil spill.
For example, the National Oil Spill Contingency Plan remains in draft stage for more than a year. In spite of this state of affairs, local authorities still have a chance to keep oil companies in check by having hefty fines for such disasters imposed via laws/regulations as soon as possible.
This was recently noted by Oil and Gas Consultant, Dr. Jan Mangal during an exclusive interview with Kaieteur News.
The former Presidential Advisor said, ‘Right now, Guyana is far from being prepared for spills, judging by the focus on amateurish public relations exercises in local water parks. But Guyana cannot become prepared overnight. There will always be a risk of oil spills with oil production. This risk can be reduced but it cannot be eliminated.”
The Consultant continued, “Reducing the probability of spills and having the assets to clean-up large spills is expensive. Companies will only apply the needed resources if they know their own profitability and viability are at stake. Guyana can incentivize the oil companies to perform by imposing laws with significant financial consequences for oil spills and other damage. Hence Guyana should focus on imposing such laws.”
Dr. Mangal added, “But sadly, the government will probably get ExxonMobil itself to help draft these laws, judging by how the government hired ExxonMobil affiliated persons to draft the local content guidelines (instead of using independent consultants like Mr. Anthony Paul). I worry that the government and large swaths of Guyana have been influenced and captured by ExxonMobil.”

Oil and Gas Consultant, Dr. Jan Mangal

Further to this, the Oil and Gas Consultant said that one also has to acknowledge the fact that the nation’s track record with the environment is quite atrocious.
In this regard, Dr. Mangal commented, “Look at gold mining, especially river dredging. Most of our major rivers have been severely damaged. And this damage is close to us, it is visible, has been happening for decades, and our country is the ‘land of many waters’, but still we accept this damage.”
The consultant commented that the nation probably has laws to protect the rivers but these are not being enforced due to corruption, and the fact that citizens have not bothered to hold their public servants to account.

NATIONAL OIL SPILL PLAN
Since 2016, calls have been unending for Guyana to have in place, a National Oil Spill Contingency Plan. To date, this document is still to be completed.
In the meantime, offshore drilling activities are poised to accelerate this year.
According to a report that was produced by Financial Analyst, Jenny Xenos, of Canaccord Genuity Corporation which is based in Canada, offshore Guyana is expected to see about 14 wells being drilled.
In an Industry Update report, the author stated that up to nine wells will be drilled on the prolific Stabroek Block, two of which are currently drilling. The Stabroek Block is operated by ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), Hess and CNOOC.
Furthermore, two wells are slated for drilling on the Orinduik Block which is under the licensed control of Tullow Oil, Total and Eco Atlantic. One well is planned for the Kanuku Block by Repsol and Tullow Oil. The Corentyne Block also has one well planned for drilling by its operators CGX and Frontera Energy. The Canje Block will also see one well being drilled by ExxonMobil, Total JHI and Mid-Atlantic.
IDB URGES
The Inter-American Development Bank (IDB) is of the firm view that Guyana should have a national oil spill contingency plan in place before oil production commences in 2020.
In its special report, the IDB noted that Guyana’s CARICOM sister, Trinidad and Tobago, which has been in the petroleum industry for more than a century, has taken the wise move to safeguard its sector with a national oil spill plan.
That plan was updated and passed by TT’s Cabinet in January 2013. The IDB said that with TT’s new plan, “deep-water drilling operators will now be required to demonstrate accessibility to a containment lap system to arrest a subsea blow out event…”
The IDB believes that Guyana can take a page from Trinidad’s book and get its own plan in place soon.
Several months have passed since the first round of consultations was held on the draft national oil spill plan. The document was submitted to Cabinet but it is still to be made public and finalized.
Leading the work on the oil spill plan is the Civil Defence Commission.