Exxon’s promises false, laughable; hold back Payara permit - Int’l Lawyer urges

Exxon’s promises false, laughable; hold back Payara permit – Int’l Lawyer urges

Aug 05, 2020 News

International Lawyer Melinda Janki is of the view that Guyana should hold back on approving the Payara Field Development Plan (FDP), as its promises of wealth for the Guyanese people are false and laughable.

International Lawyer, Melinda Janki

The company has for several weeks urged Guyana to approve the plan and permit it to move ahead with production in the field.
During its second quarter earnings call on Friday, ExxonMobil’s Senior Vice President, Neil Chapman, said that the company is waiting on approval from the Government to make its Final Investment Decision (FID). He explained that the company hopes to make such a decision by September, and that a delay of approval could cause the FID to miss a certain window, pushing it back for months.
“Everything we and the partners can do to progress Payara on schedule, we are doing and we’ve done,” he said, “but we need an approved development plan, and that approved development plan needs to come from the government.”
The line the company continues to put forward is that Guyana will lose out on billions if it does not approve the plan soon. Its Senior VP said that “what we continue to stress to the government is that if the project does get delayed, it’s a loss of value to the country.”
Janki isn’t buying it. She is of the view that it is Exxon that needs Guyana’s oil – and fast. The international lawyer explained that the company “needs free oil… [ExxonMobil needs] the Guyana oil and they want it as fast and cheap as possible” due to the glut of oil on the world market which is keeping prices low.
Former Advisor to President David Granger, Dr. Jan Mangal, had said that the ploy Guyana should not fall for is the rush by oil companies to produce oil as fast as they can.
“That’s a massive risk for Guyana,” Janki told Kaieteur News. The impact of the company’s operations on the environment is already a risk, which has been magnified by the company’s unlawful and prolonged gas flaring. Janki has criticised this as well.
Head of the Environmental Protection Agency (EPA), Dr. Vincent Adams, had even drawn attention to the risk of disaster for Guyana, evidenced by the multinational’s attitude when it revealed its opposition to paying paltry fines for six small fuel spills which occurred since production began in the Stabroek Block. Adams had said that this raises serious concerns about Exxon’s safety culture and its attitude toward environmental infractions.
Amidst these risks, the company is producing oil in the Liza Phase one project, and intends to begin production in the Phase two project in 2022, and is seeking swift approval for the Payara project.
“All the risks are on Guyana,” Janki, a staunch advocate for environmental justice said, “What price do you put on the destruction from flaring? Or the sewage pollution? Or the ocean becoming more acid?”
Despite all of these risks, Exxon appears to have been given assurances by the Government that it accepts the urge to approve the Payara FDP as fast as possible.
It is “very, very clear” that the Government and the Energy Department understands that, Chapman said during the Friday earnings call. At the time, the David Granger Coalition had still held power. Now, the Irfaan Ali led administration has taken over.
However, this does not worry ExxonMobil as it has been in contact with both major parties, and has received, according to Chapman, reassurance from the People’s Progressive Party/Civic (PPP/C) for its support of the Payara development and the Production Sharing Agreement which governs operations on the Stabroek Block.
“I’m confident that we’ll move on Payara,” Chapman said.
Experts say that this is not good for Guyana. Janki is not in favour of producing. Dr. Mangal, on the other hand, told Kaieteur News that the approval for the Payara project should be held back too, but only as leverage for improvement of the terms of the PSA.
The PSA found its genesis in a 1999 contract signed by the late President Janet Jagan, with negligible improvements made in 2016 by former Minister of Natural Resources, Raphael Trotman. The terms pose the likelihood of grave environmental harm without sufficient measures or recourse to protect the country. On top of that, Global Witness has found that Guyana is set to lose US$55B over the life of the contract, due to its lopsided make-up. Dr. Mangal said that there is no justification for Government to continue forfeiting that wealth which belongs to the people of Guyana.

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