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EPA quietly amends permit for Liza Phase Two project
– still fails to hold parent companies liable for oil spills
Kaieteur News – The Environmental Protection Agency (EPA) appears to have quietly amended and uploaded to its website, the permit for ExxonMobil’s Liza Phase Two Project. But an examination of the modifications revealed that the regulator has missed, yet again, another golden opportunity to hold the parent companies of the Stabroek Block Project, liable for any oil spills.
The Liza Unity FPSO which will be used at the Liza Phase Two project. The vessel will develop approximately 600 million barrels of oil over its 20-year life cycle.
According to the section of the permit titled “Liability for Pollution Damage”, the permit holder which is ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), shall have insurance of such type and in such amount as is customary in the international petroleum industry in accordance with good oil field practices for Petroleum Operations in progress offshore Guyana. This is in respect of the following: loss or damage to all assets used in the project; pollution caused in the course of the project for which EEPGL will be jointly and severally held responsible; loss or damage to property or bodily injury suffered by any third party in the course of the project for which EEPGL is liable according to the terms of the policy.
The EPA further notes that it shall reserve the right to request and review the environmental liability insurance policy while adding that such review is subject to the following: the provision of documentary evidence that the insurer is authorised to provide the insurance in the jurisdiction and to provide evidence of the insurer’s financial strength; the provision of details of the amount of cover and the cost profile, evidence of authorisation of the institution or parent (insurer’s) to provide insurance as well as, evidence of any supplementary cover required to cover gaps in the primary cover, inclusive of details relevant to the excess level which is the responsibility of the policyholder to cover.
It is also expected to include an agreement to provide notification to the EPA of modification, cancellation, expiration, intent to renew, renewal or non-renewal, and expiry dates of the policy; the provision of reports on whether the insurance policy is maintained or renewed so that the EPA can determine if it is acceptable or if it requires a replacement policy; and the provision of the final insurance policy or certificate of insurance, evidence of financial strength and payment of premium.
Additionally, the document goes on to state that the Permit Holder, his Servants and/or Agents shall be liable jointly and/or severally for any gross negligence or willful misconduct to the marine environment, biodiversity, protected species and natural habitat with respect to any release or discharge, spill, contaminant fluids, oil or lubricants from fuel storage at any facilities permitted under this project.
It notes too that only the Permit Holder, his Servants and/or Agents shall be 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 any release or discharge, spill, or contamination which is attributable to the Permit Holder and his agents or contractors.
Earlier this week, Kaieteur News made several efforts to contact EPA Head, Kemraj Parsram to ascertain why no provisions were made to tie the parent companies to full coverage insurance but those efforts were not successful.
Since 2015, ExxonMobil Corporation, the parent company of Esso Exploration and Production Guyana Limited, has steered clear of being tied to full coverage insurance for its Stabroek Block projects, which are certain to deliver multi-billion dollar profits on an annual basis.
Instead, it has placed only its subsidiary (EEPGL) on the hook if such an eventuality occurs offshore. This is the state of affairs with its Liza Phase One, Liza Phase Two and Payara Projects.
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