Guyana must know financial devastation that can be caused by oil spill – Norton

Oct 15, 2023 ExxonMobil, News, Oil & Gas

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Kaieteur News – Leader of the Opposition, Aubrey Norton believes an economic assessment must be conducted to determine the likely financial devastation that can be caused by an oil spill that occurs in the Stabroek Block.

In an invited comment during his virtual press conference on Friday, the Leader said the Opposition in an engagement with ExxonMobil registered its concerns of an oil spill when the company admitted that a major disaster is likely to cost above the US$2 billion affiliate guarantee that has been provided to the Government of Guyana (GoG). As such, Norton said the Opposition noted its support for a parent company guarantee.

According to him, “Exxon at the time said that they were prepared to honour and to deal with any oil spill…and so we anticipate that they will fulfill that promise but outside of that, we have always been saying that all of these things should have proper feasibility studies (and) proper analysis and we will continue to push to ensure that that is the case.”

Norton added, “You cannot operate such a mammoth industry without proper economic analysis.” The Leader said the economic study to determine the likely devastation from a spill, is particularly important even as Guyana prepares for further exploration at other oil blocks. He said, “It (the study) is even useful for us to know because in the future you have to plan how you deal with all of these blocks, etcetera and you are dependent upon data to do that.”

The Economic Advisor to the Opposition Leader, Elson Low also weighed in on the subject, urging the importance of the study. He reasoned, “It is vital that appropriate protocols are in place if there is going to be additional production and it is vital that the appropriate studies are done to that effect. The reason that we are asking these questions is because we understand the severity and seriousness of the issue.”

He was referring to the fact that ExxonMobil is currently producing oil at the Liza One and Liza Two projects above the designed safety rates.

Meanwhile, the Opposition Leader pointed out, “We also are of the view that as a country we lack the capacity to deal with those things and therefore we have to put the mechanisms in place.”

He was keen to note that while the Opposition wants to see Exxon do business, he wants Guyanese to benefit from the vast oil discovered offshore, but at the same time the necessary safeguards must be in place to protect the country and its resources.

In September, Kaieteur News reported that four months after the President of Exxon Mobil Corporation (XOM), Darren Woods urged shareholders of the fortune 500 company to vote against a petition calling for a thorough study on the economic impacts of an oil spill from the Stabroek Block, the company’s consultant; Environmental Resources Management (ERM) revealed that no such assessment was ever conducted.

Woods had called on the shareholders of the company to vote against the proposal since he believes there were adequate studies already done to determine impacts to the Region.

ERM’s Socioeconomic Resources / Stakeholder Engagement Specialist, Anna Sundby, however during a public consultation hosted at the Leonora Technical Institute, West Coast Demerara, revealed that no such financial study was ever done in Guyana. She was at the time responding to a question from Kaieteur News on what the likely devastation of an oil spill at the sixth project could cost.

Sundby in response explained, “I can’t say because it’s not part of the EIA. We haven’t done an economic model of what the maximum economic impact would be. What we focus on with the unplanned events chapter is identifying what the risk of those scenarios are, so we can put the right measures in place to manage that risk and so that really comes down to the oil spill response plan.”

Following up, Kaieteur News asked the consultant if such an assessment was ever conducted in prior EIAs or separately to underline the cost associated with a spill that can occur at any of the deepwater projects. To this end, Sundby explained that ERM has never undertaken such a task, since evaluating the cost of a spill is not ideally part of an EIA.

The revelation that such a key assessment is yet to be conducted comes months after President and Chief Executive Officer (CEO) of XOM, Darren Woods told shareholders of the company to vote against the need for such an assessment since it was a waste of time and money.

Woods during Exxon Mobil’s Annual Shareholder Meeting in May this year said, “Given the comprehensive materials that are publicly available on our website, including our preparedness plan and the EIAs (Environmental Impact Assessments) related to our Guyana operations, creating an additional report as requested by this proposal would place an unnecessary administrative burden on ExxonMobil, be wasteful of the Company’s time and resources, and therefore is not in the best interests of shareholders. For the reasons stated above, the Board recommends a vote against this proposal.”

Mercy Investment Services Inc., a Shareholder in the company submitted a proposal seeking support for a thorough assessment to be conducted of the likely impacts to the Caribbean islands. It was later defeated as majority of the oil giant’s Shareholders voted against the proposal.

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• assessment, devastation, Economic, oil, spill, study

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