CJ dismisses challenge to Minister Trotman’s issuance of oil exploration licences

Feb 13, 2020 News

Chief Justice Roxane George has dismissed the legal challenge to Minister of Natural Resources, Raphael Trotman over the issuance of exploration licenses to subsidiary oil companies to carry out works offshore Guyana. The decision was handed down yesterday at the Georgetown High Court.
The case was filed in the Court by local activist Ramon Gaskin.

Chief Justice Roxane George

Gaskin, through his legal team, comprising Trinidad-based Senior Counsel, Seenath Jairam and environmental Attorney Melinda Janki, applied to have Trotman’s actions deemed unlawful and overturned in view of the fact that three oil companies – Esso Exploration & Production Guyana Limited (Esso), Hess Guyana Limited (Hess) and CNOOC Nexen Petroleum Guyana Ltd (NEXEN) – were issued Petroleum Production Licences (PPL) based on an environmental permit issued to one company alone–Esso.
Gaskin’s lawyers had contended that in the absence of the environmental permit issued to Hess and NEXEN in accordance with part IV of the Environmental Permit Act, Trotman was prohibited from granting the PPL to three companies to carry out the LIZA 1 project. The Attorneys urged that the respondent (Trotman)’s powers to issue a PPL was restricted to Esso only, and could not include NEXEN and Hess.
It was submitted that the Minister acted illegally, ultra vires, irrationally, arbitrarily, capriciously, erroneously, and in excess of his jurisdiction, contrary to sections 14 of the Environmental Permit Act (EPA).
More specifically, Gaskin sought to block the companies from proceeding with their exploration and production on the grounds that Hess and NEXEN are covered by the environmental permits issued to ExxonMobil, through its local subsidiary Esso Exploration and Production Guyana Limited. He reasoned that Hess and NEXEN will escape liability should there be an incident such as an oil spill that can affect the Caribbean islands.

Ramon Gaskin

However, Chief Justice George determined that in her view, the PPL was properly issued.
In her ruling yesterday, Justice George found that the issuance of a permit to Esso for the Liza Project satisfied the requirement of the Environmental Permit Act, that a project must not be commenced without first obtaining an environmental permit, and as Esso’s permit covered all three Contractor parties – Esso, Hess and CNOOC – the Minister acted properly in the exercise of his discretion to grant the Licence to the three Contractor parties.
The Chief Justice essentially agreed with the submissions made by the Attorney-General Basil Williams, SC, Solicitor-General Nigel Hawke, and Deputy Solicitor-General Deborah Kumar, who represented Minister Trotman, as well as Edward Luckhoo, SC, who was associated with Maria Luckhoo for Esso and HESS represented Andrew M.F. Pollard, SC and Nigel Hughes.

Minister of Natural Resources Raphael Trotman

The respondent, Minister Trotman and added respondents Esso, Hess and CNOOC had submitted that Esso’s being issued with an environmental permit was sufficient to satisfy the Environmental Permit Act, as (a) permits are issued for Projects (not persons); and (b) the obligation to obtain an environmental permit (EP) prior to commencing a Project was classified in law as a ‘joint and several’ obligation, the effect of which was that Esso’s obtaining the required permit covered all three of the Contractor parties.
“I agree with the submissions on behalf of the respondents that the EP was issued in relation to a project, and that it was not necessary for it to be issued to each company which is party to the Petroleum Act (PA) for the execution of the project.”
In short, the CJ noted that even though the environmental permit was issued to Esso alone, the PA caters for joint and several ventures, and therefore Esso’s permit covered everyone.
The Judge noted that Hess and NEXEN as companies satisfied the requirements to be granted a licence under sections of the Petroleum Act which state that a licence may be granted to two or more persons associated together in any form of joint arrangement.
“The PA speaks to Esso, Hess and NEXEN being associated with joint arrangements.
Subsection 9 (3) clearly permits a PPL issued in the names of two or more persons and, importantly, for them to be collectively called licensees.
As a collective or joint licensee their obligation under the PPL is statutorily joint and several, meaning that each of them or all of them would be liable under the terms of the PPL…,” the Chief Justice added.
In view of the circumstances, she dismissed the application and ordered Gaskin to pay costs of $100,000 to the Minister.