Oil operators will be able to recover “all costs” associated with having an insurance policy, thanks to the Production Sharing Agreement (PSAs) signed with the Government of Guyana.
However, a perusal of several contracts in countries such as Chad, Ghana, Chad, China, and even with Trinidad and Tobago, show that operators there are not allowed to do so.
Considering this finding, Kaieteur News made contact with Trinidadian Oil and Gas Consultant, Anthony Paul on the matter. Paul said that making insurance costs recoverable is something that varies from country to country. The Local Content Expert said that countries tend to limit cost recovery to direct costs to the operations and insurance is considered an indirect cost.
“Indirect costs such as insurance are treated differently, in that, they may be non-recoverable or only partially recoverable. But no, it is not normal for the entire insurance and the premium to be recoverable.”
The PSAs Guyana has with oil operators also allow them to self-insure. This means that the company has given the nation some level of assurance that it will handle the liabilities that come with any possible oil spill. But the Energy Department has since made it pellucid that it would not be accepting this.
In fact, the department has initiated discussions with Central Bank to ensure oil companies comply with the nation’s laws on having a recognized insurance policy. Making this declaration was Energy Department Head, Dr. Mark Bynoe.
So far, Head of the Environmental Protection Agency (EPA) was able to get ExxonMobil to guarantee that it will stand the costs of an oil spill should one occur in the Stabroek Block.
This was one of the conditions upon which it received an Environmental Permit for drilling of the Yellow tail-1 well. It is approximately six miles (10 kilometers) west of Exxon’s Tilapia-1 in the Turbot area.
Jun 26, 2019By Sean Devers Romrima Tennis Club’s Gavin Lewis and Afruica Gentle captured the Lion’s share of the prizes presented by the Guyana Tennis Association (GTA) when the Awards Ceremony for the GBTI...
By Sir Ronald Sanders In what is increasingly becoming a pattern of ignoring established procedures and authority in the... more
Editor’s Note, If your sent letter was not published and you felt its contents were valid and devoid of libel or personal attacks, please contact us by phone or email.
Feel free to send us your comments and/or criticisms.
Contact: 624-6456; 225-8452; 225-8458; 225-8463; 225-8465; 225-8473 or 225-8491.
Or by Email: [email protected] / [email protected]