Produce insurance policy to clear the air – former EPA Head challenges ExxonMobil Guyana President

Mar 02, 2022 News

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Kaieteur News – Former Head of the Environmental Protection Agency (EPA), Dr. Vincent Adams is challenging the President of ExxonMobil Guyana, Alistair Routledge, to show the country precisely how much insurance the nation has, from the company, to cover costs associated with the dreaded eventuality of an oil spill.
Dr. Adams was at the time responding to a statement issued by the oil company ExxonMobil Guyana, in which it refuted the claims made by the former EPA head, that it had previously agreed to offer Guyana an insurance coverage to the tune of US$2.5 billion.

The ex-boss of the EPA, in an article recently published by Kaieteur News had asked government to explain why it reversed an agreement, which the EPA formerly had with the operator to not only guarantee US$2.5 billion from its subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) but also cover damages that exceed this amount.
To this end, Exxon came forward and refuted the foregoing, stating that it never agreed to an insurance value of US$2.5 billion with the previous EPA administration, headed by Dr. Adams. Instead, the oil giant said, “…we’re working with the Environmental Protection Agency and our co-venturers to put in place a combined US$2.0Bn of affiliate company guarantees, a value exceeding equivalent guarantees required by regulators in Canada, the United States and United Kingdom”.
It was keen to note that EEPGL, the operator of the Stabroek block, was established since 1998, and had, as of year-end 2020, almost $US5.0Bn in assets, which is a primary form of financial assurance.
In this regard, Dr. Adams has asked the parent company of the operator, ExxonMobil to produce the relevant documents to tell the country exactly what coverage it has been given to clean up after an oil spill.
He reasoned that ExxonMobil “cleverly avoided the amount of that insurance coverage” being offered to Guyana, while the company only said “it has insurance coverage for all of its petroleum activities”.
“So, Exxon must state that if it is not the US$2.5 Billion, what is it? And must produce the documentation,” Dr. Adams contended.
He noted too that Exxon also claims that “EEPGL had, as of year-end 2020, almost $US5.0Bn in assets”, while “cunningly evading” what EEPGL’s assets were in 2019, when the Permits were signed.
In fact, he said that the real truth is that Exxon purposely dodged that EEPGL’s assets were almost nothing in 2019 before production, which was the reason EPA did not allow the company to be self-insured.

The former EPA head also argued that traces of documents pertaining to the insurance were left at the EPA office, which he called on to release same.
He said, “As stated in my letter to the Editor, since that time, around April 2019 to August 2020, regular meetings were held among the lawyers of the EPA and EEPGL to agree upon how liabilities above the US$2.5 Billion would be shared among the parent companies of ExxonMobil, Hess and CNOOC (China National Offshore Oil Corporation). Draft documents detailing their proposal were brought to each of these meetings, and I was briefed after each meeting. I therefore challenge Exxon to deny these meetings, recognizing that these draft documents, emails and calendars of participants can be retrieved”.
On another note, the specialist said he was curious to know why ExxonMobil never denied that it had offered the country this policy before, especially since this matter has been constantly reported on between April 2019 and August 2020.
“During that same period, April 2019 to August 2020, EPA employees and I, incessantly broadcast through all of the media outlets, this unprecedented accomplishment of obtaining what we called ‘unlimited liability coverage’. So much so, that many questions were raised in the media as to how is it possible that the EPA could depart from the Government/EEPGL Contract, when the Government continues to claim that the Contract is sacrosanct.
“ Thus, with all of that media coverage including the EPA and Exxon ongoing meetings to finalize the arrangement, Exxon must answer the commonsense question as to why they did not ever deny any of it before now,” the former EPA Head said.
Further to this, Dr. Adams pointed out that the highly publicized US$2.5 billion insurance had caught the attention of the Guyana Insurance Association, which contended that the insurance carried by a foreign company, has to be transferred to Guyana in accordance with Guyana’s laws. This, according to him, triggered a meeting between the Bank of Guyana, the Guyana Insurance Association, the Department of Energy, and the EPA, held at the Office of the Governor of the Bank of Guyana, to discuss how to proceed with the transfer of the insurance to Guyana.
Importantly, he said, an email trail exists to prove that this meeting was indeed held along with the reason for the meeting and its agenda.
The need for Guyana to secure full coverage insurance for a possible oil spill has been highlighted in scenarios around the world. Only recently, an oil spill occurred in Peru, a South American country.
The oil spill occurred on January 15, 2022 at one of the La Pampilla refineries off the coast of Ventanilla in the region of Lima, Peru. It was reported that the spill was caused by shock waves from an undersea volcanic eruption near Tonga in the South Pacific Ocean.
Almost one month after the spill, the country is still grappling with the cleaning up of the aftermath of more than 12, 000 barrels of crude that contaminated its shores.
The clean-up and remediation of the spilled crude that contaminated the shores and waters of Peru will cost US$65 million, according to the Spanish oil giant, Repsol’s Chief Executive Officer (CEO), Josu Jon Imaz.

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