Latest update April 20th, 2024 12:59 AM
May 08, 2023 News
…says Guyana will be left at the mercy of oil giant without signed document
Kaieteur News – While the Government of Guyana (GoG) is gearing up to appeal a Court ruling which orders United States oil giant, ExxonMobil to furnish the country with a parent company guarantee to cover the costs of an oil spill that may occur as a result of its operations in the Stabroek Block, Attorney-at-Law Elizabeth Deane-Hughes believes the administration would be better off enforcing the Judge’s decision.
High Court Judge, Justice Sandil Kissoon on Wednesday handed down a historic ruling, ordering Exxon to supply the nation with a signed parent company guarantee to safeguard Guyana against the devastating effects of an oil spill within the next thirty days.
He said the Environmental Protection Agency (EPA) had shelved its statutory responsibilities in exchange of a derelict and submissive deposition, leaving “Guyana and its people in grave potential danger of calamitous disaster.” This is so as the renewed Permit issued for the first project to Exxon states at Section 14 that the parent company guarantee should be in place.
In an invited comment on the matter, Deane-Hughes an advocate for better management of the petroleum sector explained that without the parent company guarantee (PCG), Guyana would be left at the mercy of the oil company. She said, “A guarantee is just a legal document; there is no payment or policy. It’s an enforceable undertaking. It would be preferable to have the guarantee as stated in the permit/licence in place rather than to have to prove in court words uttered by representatives of financially viable and capable companies.”
The advocate pointed out that ExxonMobil just recently received an award for the rapid speed its affiliate Esso Exploration and Production Guyana Limited (EEPGL) / ExxonMobil Guyana, was able to develop the Liza Phase One in the Stabroek Block.
This rapid pace of development, coupled with the increased rate of oil production can also expose the nation to greater human errors and material failures Deane-Hughes pointed out, as she highlighted the need for ExxonMobil to provide the country with a guarantee to cover costs of its limited liability company- that operates the Block- would fail to meet.
She questioned, “What happens if an unexpected and unprecedented spill was to occur in our Stabroek oil field? Will comforting words be uttered in the past pay for this?”
The Attorney noted that Ghana and Nigeria both took an average of 15 years to settle oil spill related issues with Shell and Exxon. This she said points to the importance of the guarantee, as Guyana would have to spend years battling in Court to get the oil company to take care of the damages, based on their promises to do so.
The advocate was keen to note that the company representatives who offered these verbal assurances to Guyana may very well not even be here, if an oil spill were to occur many years into the future.
She argued that signing a PCG would not cost ExxonMobil a penny and should moreover not be an issue for the company if all its safety, international norms and daily practices are in order.
Oil spill damage
Guyana currently has two operational Floating Production Storage and Offloading (FPSO) vessels producing oil in the Liza One and Two fields, operated by ExxonMobil Guyana. The total production, approximately 400,000 barrels per day, often exceeds the safe operating limits outlined in the Environmental Impact Assessments (EIAs).
The EIAs conducted by Exxon have outlined that an oil spill can have far reaching impacts and based on the prevailing conditions, can even impact Guyana’s Caribbean neighbours.
Despite the potential damages that can be done, Guyana’s EPA have been approving more projects in the absence of an unlimited parent guarantee. This had stirred fear in the minds of Guyanese, who argue that the resources earned by the country would not be sufficient to respond to a massive spill.
In the meantime, a third offshore project is expected to start up before the end of 2023, while the fourth project is likely to come on stream the following year. Exxon only last month received approval from the regulator for its fifth project in the Stabroek Block.
Government has said it aims to produce a million barrels of oil per day by 2027.
Citizens in Guyana have been protesting against the lack of full liability coverage from ExxonMobil, since they fear the costs associated with cleaning up a spill will be their burden. https://www.kaieteurnewsonline.com/2023/03/09/women-take-to-the-streets-to-have-full-liability-coverage-from-exxon/
Where is the BETTER MANAGEMENT/RENEGOTIATION OF THE OIL CONTRACTS you promised Jagdeo?
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