Exxon must compensate any nation affected by Payara oil spill

Oct 04, 2020 News

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Demands of environmental permit…

By Kiana Wilburg

Kaieteur News – Whether it is Guyana or one of its regional neighbours, ExxonMobil will have to ensure proper compensation for the damage or loss caused by any unmitigated oil spill from the Payara project which gets underway by 2024. This is one of the key provisions that the People’s Progressive Party/Civic (PPP/C) administration was able to secure during recently concluded negotiations for Payara’s environmental permit.
This clause was specifically outlined under section 13.0 of the permit issued by the Environmental Protection Agency (EPA). The section which deals with Liability for Pollution Damage says at 13.7: “The Permit Holder shall compensate any party who suffers any loss or damage as a result of the attributed project, in accordance with Section 19 (3) (e) of the Environmental Protection Act Cap. 20: 50, Laws of Guyana.”
The permit also goes on to state that ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), its servants and/or agents, shall be held liable jointly and/or severally for environmental damage due to pollution from its activities within Guyana, its territorial waters, contiguous zones, continental margins, continental shelf, and Exclusive Economic Zone, inclusive of damage to the marine environment, biodiversity, protected species and natural habitat.
With respect to the relevant insurance coverage for any possible damage or loss, the permit notes that it has to be in such amount as is customary with international petroleum industry norms. The EPA also made it clear that it reserves the right to request documentary evidence that the insurer is authorized to provide such insurance in the jurisdiction as well as to see evidence of the insurer’s financial strength.
The EPA will also demand to see legally binding documents that EEPGL’s parent company, being ExxonMobil, and its partners in the Stabroek block, being Hess Corporation and CNOOC/NEXEN, will undertake to provide adequate financial resources to ensure all environmental obligations by their subsidiaries will be met.
Since last year, Kaieteur News would have advocated for national discussions as well as for the government to put safeguards for compensation in place especially when one considers the possible reach of an unmitigated oil spill from the Payara project.
These calls were premised on revelations contained in EEPGL’s Environmental Impact Assessment (EIA) for Payara. This document states that while EEPGL would be taking all precautions, there is a possibility for an oil spill to occur in a number of scenarios. One instance that was considered indicated that an unmitigated oil spill from the Payara field could affect many of Guyana’s neighbours including Trinidad and Tobago, Aruba, Bonaire, Curaçao; the southern Lesser Antilles; and the Greater Antilles.
The EIA in particular notes that an unmitigated oil spill from a loss-of-well-control during the December-May season would take a west-northwesterly route through the Gulf of Paria and across the southern edge of the Caribbean Sea.
Comparatively strong easterly winds in the December−May season would expose the northern coast of South America and the southern Lesser Antilles to the bulk of shoreline oiling risk. It was further noted that an equivalent spill during the June–November season would be exposed to lower wind speeds, allowing the surface oil to be transported to the north of Trinidad and Tobago and swept into the Caribbean Sea.
The EIA states that the plume would track slightly more to the north, across the central Caribbean Sea and the central and southern portions of the Lesser Antilles, to the Greater Antilles.
Significantly, the EIA notes that due to its location at the southern end of the Lesser Antilles, Trinidad and Tobago is the only island that would have the potential to be affected by the trans-boundary effects of any unmitigated loss-of-well-control event, regardless of season.
It states that the probability of oiling at least a portion of the coast of Trinidad and Tobago and/or its coastal waters is approximately 90 to 100 percent for any of the unmitigated loss-of-well-control event scenarios.
With the exception of the Gulf of Venezuela, oil spill modelling indicates a five to 60 percent probability of surface oil reaching the Venezuelan coastal zone, depending on location and season.
Further, it was outlined in the report that Venezuela has numerous marine turtle nesting beaches, mangroves, important bird areas, coral reefs, and shallow coastal lagoons that would be at risk of oiling. As for Trinidad, it was noted that there are numerous fishing areas which could be impacted by a large spill from a loss-of-well-control event.
Additionally, the EIA notes that the economies of Aruba, Bonaire, and Curaçao are dependent on tourism to varying degrees but especially so in Bonaire, which is known internationally as a destination for recreational diving.
Considering this, the EIA states that an oil spill would have economic effects but the extent of this would depend to a large degree on the scale of the spill and how rapidly they would recover.

 

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