Guyana still in the dark about contractual provisions for possible oil spill disaster by ExxonMobil…Chartered Accountant calls for more transparency

Dec 25, 2017 News

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By Kiana Wilburg
Earlier this month, the Ministry of Natural Resources in collaboration with ExxonMobil Guyana held a public lecture on oil spill preparedness.
In the profusion of technical information that was made public, there remained one area which had little or no coverage. It is the contractual provisions in place for a possible oil spill by ExxonMobil.
While this was absent from the presentations made at the symposium, pointed questions from Chartered Accountant, Chris Ram, did not solicit any favourable response.
Ram said, “I was disappointed with the lecture. I asked about the contractual provisions in place should an oil spill occur…I did not get a favourable response.
“I think we have two years left (before we head into production of oil) but I believe our advanced planning (for the possibility of an oil spill) should have been far greater. The real problem is, we have a Minister of Natural Resources (Raphael Trotman) who is completely lost. He is absolutely clueless.”
The anticorruption advocate added, “Now, you would think that the Minister responsible for the environment would play a prominent role in such an exercise. It perhaps will come as no surprise that the Ministry of the Presidency missed this opportunity to show not only that it was aware of the dangers but to reassure the public.”
Additionally, Ram also recalled an article published on Sunday which speaks to how five companies exaggerated their capability to respond to an oil spill. ExxonMobil is one of those entities.
The Chartered Accountant said, “I don’t think ExxonMobil is irresponsible to not take the environment seriously. But I think they are only concerned with an oil spill and its direct implications and not the broader issues such as the livelihoods of people onshore, the implications for persons who are in the fishing sector etc.”
Ram added, “I don’t think there is sufficient data on what would happen if an oil spill occurs and oil is being expelled into the ocean on a daily basis; what it would do to the fishing population and what it would do to endangered species such as turtles in that region.”
He insists that ExxonMobil’s oil spill response plan should be made public along with documents crucial to the petroleum sector. He insists that the Environmental Protection Agency as well as Conservation International really ought to be doing some more on this front.
OIL SPILL
RESPONSE PLANS
Every country is expected to have in its possession, an oil spill response plan that the operator/company would implement in the event of such a disaster.
ExxonMobil will be hitting the start button on production in 2020 and Guyana is yet to see such a document from the company or the Government. It is important, however, that citizens are given ample opportunity to examine any oil spill response plan which would be submitted by this company.
In that document, ExxonMobil is expected to state the possible worse case scenarios that could occur during an oil spill in Guyana’s waters and how it would respond to it.
But an oil spill response plan does not necessarily mean that a company is fully prepared to deal with such a tragedy. In 2010, the heads of some of the world’s biggest oil companies were grilled at a congressional panel which focused on the mistakes made in the infamous Gulf of Mexico oil spill.
This was recognized as the worst oil spill in U.S. history.
Within days of the April 20, 2010 explosion and sinking of the Deepwater Horizon oil rig in the Gulf of Mexico, underwater cameras revealed that a pipe was leaking oil and gas on the ocean floor about 42 miles off the coast of Louisiana.
By the time the well was capped on July 15, 2010 (87 days later), an estimated 3.19 million barrels of oil had leaked into the Gulf. Rex Tillerson, former Chairman and Chief Executive Officer of ExxonMobil, was one of the witnesses. He tried to distance himself from the mistakes of his counterpart, BP Oil Industry Company which was deemed responsible for the spill.
Tillerson had informed the committee that the blowout would not have occurred had ExxonMobil been drilling the well.
Tillerson explained that his company would have done the job differently. But members of the panel were not impressed by his mere words. Tillerson was attacked by some politicians for being unprepared for a similar disaster.
A member of the committee pointed out that ExxonMobil’s oil response plan for the Gulf of Mexico was written by the same contractor used by BP. BP relied on Marine Spill Response Corporation.
The Congressional panel pointed out that the disaster saw a spill of up to 40,000 barrels per day which was overwhelming at that point. Yet, the oil spill response plan for ExxonMobil said that it could effectively deal with 166,000 barrels of oil per day in the worst case scenario.
Tillerson said, “When these things happen we are not well equipped to deal with them…There will be impacts as we are seeing.
“We have never represented anything different than that. And the emphasis has always been on preventing these things from occurring because when they happen we are not well equipped to deal with them,”
At another hearing in 2010, the Energy and Commerce Subcommittee on the Environment in the USA had a session entitled “Drilling Down on America’s Energy Future: Safety, Security, and Clean Energy.”
The hearing came on the heels of the infamous Gulf of Mexico Oil Spill.
The witnesses included Rex Tillerson, former Chairman and Chief Executive Officer of, ExxonMobil; John Watson, Chairman and Chief Executive Officer, Chevron Corporation; James Mulva, Chairman and Chief Executive Officer, ConocoPhillips; Lamar McKay, former President and Chairman, BP America, Inc; Marvin Odum, former President, Shell Oil Company.
The Chairman of the Committee at the time was Representative Edward Markey. Markley noted that the Gulf of Mexico Response Plan by ExxonMobil, Chevron, Conoco Philips and Shell were virtually identical to that of BP’s.
Markey pointed out to Tillerson that like BP on page 116, his plan lists walruses – an animal whose range is confined to the Arctic Region- under sensitive biological and human resources.
“As I am sure you know there aren’t any walruses in the Gulf of Mexico and there have not been for three million years. How can Exxon have walruses in the response plan for the Gulf of Mexico?”
After going around in circles, Tillerson acquiesced that it was unfortunate and embarrassing that that was included. Markey also asked the other companies how they would respond to having walruses in their plan. Like Tillerson, they agreed that it was an unfortunate mistake.
The Chairman also pointed out that in the response plan, there was reference to a Dr. Lutz who is referred to as a technical support person. However, that person died four years before the plan was even produced by the operators.
Tillerson tried to justify having a person who has been dead for four years in the response plan. He said that the person may have passed on but the importance of his work did not die with him. Markey then questioned if this is the case, then how one can justify including the phone number of the person in the said response plan.
The Chairman stressed that if this could be done then Tillerson and others could not have taken such a responsibility seriously.
The worrying part was that the other companies had the same person included in their plan. Markley said it would appear that the only technology the operators relied on to put together their response plan was a photocopying machine. Markey said that there wasn’t enough effort put together to ensure that if an oil spill occurred they would be able to respond.

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