Guyana should get solid financial assurance from Exxon to protect against oil disasters

Guyana should get solid financial assurance from Exxon to protect against oil disasters – Int’l lawyer

Mar 24, 2021 News

International Lawyer, Melinda Janki

Kaieteur News – It is high time for Guyana to secure “solid financial assurance” from Stabroek Block operators ExxonMobil, CNOOC/NEXEN and Hess to ensure that it is protected should an oil disaster occur on our shores, says international lawyer, Melinda Janki.
And with ExxonMobil’s looming financial troubles, she said “sooner is better than later.”
“We know that ExxonMobil is in financial difficulties. ExxonMobil just wrote off 30% of its proven reserves. ExxonMobil has borrowed around US$70 billion, and still can’t make a profit,” Janki told to Kaieteur News in an invited comment.
To understand the magnitude of costs behind an oil disaster, Janki pointed to the British Petroleum (BP) and its well blowout in the Gulf of Mexico of 2010. In that disaster, which is deemed as the world’s worst accidental oil spill, BP was required to pay for US$70B in damages. Eleven years later, BP is still paying for that spill.
Added to that, is the fact that ExxonMobil’s local subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) does not hold enough assets to properly protect Guyana. In fact, EEGPL has so little assets that Guyana would be left to bear the brunt of costs should disaster strike.
“Guyana could be left with a billion dollar liability so the Government must now require ExxonMobil and its partners to provide a performance bond or financial guarantee to protect Guyana,” the international lawyer continued.
So far, Guyana has been unable to obtain written evidence that the Stabroek Block operators would accept full liability of any ensuing costs.
What Guyana currently has is an “assurance” from EEPGL that the parent companies will do such. But this is not enough – it has been over a year since the company made that commitment to the Environmental Protection Agency (EPA).
Kaieteur News had reported extensively on this very issue and had reached out to Exxon’s Government and Public Affairs Advisor, Janelle Persaud via email to ascertain whether the company has stuck to its commitment and provided evidence to Government that Guyana has comprehensive oil disaster insurance coverage from the parent companies. Persaud gave a reply, but the oil giant’s spokeswoman dodged the question with the response, which provided no indication of such.
The company in its response had boasted of being “committed to environmental performance excellence”, however it is no stranger to oil spills.
There was the 1989 Exxon Valdez Oil spill, said to be one of the most devastating man-made disasters in the world. The Exxon-Valdez oil tanker ran into a reef in Alaska causing more than 10 million gallons of oil to cloak the Alaska coastline. The spill killed thousands of whales, seabirds and other marine life. The tourism and fishing industries were devastated for years.