May 14, 2022 News
Kaieteur News – The amended version of a Motion submitted by the Opposition seeking full insurance coverage for ExxonMobil’s Stabroek Block’s projects, is soon to be debated in the National Assembly.
Shadow Oil and Gas Minister, David Patterson, who filed the Motion back in February of this year, was considering legal action to secure full insurance coverage, following the weakening of the Parliamentary action by House Speaker, Mazoor Nadir.
On the sidelines of an event on Wednesday evening, Patterson in a brief comment told Kaieteur News that the Motion will still be resubmitted to the House for debates in the new week.
He could not say how soon the Motion will be debated but noted that it was an opportunity for the government to show how much it cares for its country. The Opposition’s Motion on full coverage insurance is calling for the Government of Guyana, to include full unlimited liability coverage for oil spills and other disasters related to petroleum production, as a condition for granting approval for ExxonMobil’s fourth project, the Yellowtail development, and all other future petroleum development.
It is also seeking an independent analysis on the possible ill effects of an oil spill and for this report to be submitted to the Parliamentary Committee of Natural Resources, to be used as a reference for all other future oil development submissions.
The oil company has since gotten the necessary environmental approvals to proceed with the Yellowtail development, in the absence of full insurance coverage. Nevertheless, ExxonMobil is currently seeking approval for its fifth oil project, Uaru Plus.
“It’s very disturbing that we have to fight Exxon so hard to get them to do what they have to do in other countries,” the former Minister said, as he went on to remind of the importance of the motion.
He said, “The Insurance Motion is so that we can have a clear guideline set out for the company to comply with. We have several different versions on what is covered and what is not covered (in the environmental Permits) so we need it to be very explicit on what is covered and what isn’t. We also want to make it mandatory to any future licenses being granted so that we don’t have to go through this entire process again. We want to ensure that the government supports the call and to ensure that the country knows the Opposition’s position.”
The Insurance Motion
On February 16, Patterson filed the Motion in the National Assembly seeking full coverage insurance of Guyana’s oil activities. The Speaker in a written response to the MP, dated February 28, 2022, informed that 13 of the 20 clauses in Patterson’s Motion have been disallowed, while two of the ‘whereas’ clauses were also amended. The Speaker’s response was sent by the Clerk of the National Assembly, Mr. Sherlock Isaacs. In the document seen by Kaieteur News, Isaacs stated that the 1st, 2nd, 4th, 7th, 8th, 11th, 12th, 14th, 15th, 16th, 17th, 18th and 19th ‘whereas’ clauses were removed.
The second clause, in the insurance Motion states, “And Whereas worldwide offshore oil production operations show a high likelihood of an oil spill occurring offshore Guyana, and that such likelihood of a spill increases exponentially with the rapid increase in offshore production activities” and the fourth clause read, “And Whereas the emergency response and cleanup of the British Petroleum Macondo oil spill in the Gulf of Mexico have so far cost more than $70 billion USD.”
Even though these details have been widely reported on, and are moreover available for verification through quick research, these clauses were removed as the Speaker concluded they must be based on facts. The removal of these clauses means that they will not be debated in the National Assembly.
On the other hand, another critical clause that was struck out highlighted or reminded the government that the Liza Two Permit allows for unlimited liability coverage. Clause 11 and 12 which were removed states, “And Whereas EEPGL agreed to the unlimited liability coverage commitment in the Liza 2 Permit and urgent purchase of the maximum available private insurance prior to signing the Permit; And Whereas EEPGL requested a concession for EPA (Environmental Protection Agency) to sign the Permit in order to maintain the confidence of its investors, conditioned upon giving EEPGL time to negotiate an Agreement amongst its parent companies on how those liabilities would be shared amongst the companies.”
ExxonMobil has, since the startup of its oil operations in December 2019, evaded demands to provide insurance coverage, and instead tied its subsidiary to providing this guarantee. This has been the center of debates as the fairly young company with assets worth only around US$5 billion, would not be able to effectively cover all costs associated with an oil spill in Guyana, should such an adverse event occur.
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