Latest update November 29th, 2024 1:00 AM
Exxon testing oil spill response equipment but Guyana still without full coverage insurance
During the recent exercise conducted by ExxonMobil Guyana.
Kaieteur News – American oil giant, ExxonMobil has commenced conducting the field testing of oil spill response equipment, but the reality is, in the event of an oil spill – Guyana only has limited liability insurance with the oil giant’s subsidiary.Amid deep concerns about oil companies operating in Guyana’s backyard while the country is not fully protected by full-cover insurance – the Head of Esso Exploration and Production Guyana Limited (EEPGL), Alistair Routledge, on Monday sought to defend the size of the insurance policy provided by the subsidiary which has been the Operator of the oil rich Stabroek Block since 1999.
His comments came on the heels of an eight-year bashing, particularly from Kaieteur News, on the need for ExxonMobil Corporation, the parent company of EEPGL, to formally agree that it would handle all costs, above and beyond what cannot be met by EEPGL, for an unmitigated oil spill from its operations.
ExxonMobil Guyana, Chief Executive Officer, Alistair Routledge.
On Tuesday, ExxonMobil Guyana disclosed that it recently conducted the field testing of the oil spill response equipment. The company stated that the exercise was intended to ensure readiness to respond in the unlikely event of an offshore oil spill while utilising available resources such as in-country personnel, vessels, and response equipment.
In his comment on the exercise, Routledge said, “Our approach to emergency response is to prevent, prepare and practice. Prevention is our primary objective but training for potential scenarios is also an important component of that approach.”
He added, “Through robust training and exercises, utilizing advanced technology, we ensure our response teams and stakeholders understand their roles and responsibilities and are ready to respond.”
In a statement on Monday, Routledge did not confirm or deny that ExxonMobil Corporation, which milks multi-billion dollar profits from Guyana, has a moral and legal obligation to ensure that it protects the environment and the citizens of the countries its subsidiaries operate in.
He did, however, defend the US$2B insurance coverage EEPGL is throwing at Guyana. Routledge is of the view that the size of the policy is in keeping with international industry standards. Routledge assured as well that for every project in Guyana, EEPGL has put in place mitigations and processes that help to prevent adverse events by utilising the best technologies, equipment, and people in our operations.
Importantly, EEPGL had made the same claim prior to the Liza Phase One Project coming on stream. When it did, the vessel’s gas compressor was subsequently plagued with a series of mechanical issues, which led to over 14 billion standard cubic feet of gas being burnt. This form of environmental pollution has been taking place from December 2019, when oil production started, to now. The company has pledged to have the said issues fixed by mid-year and bring an end to the toxic pollution of the nation’s airspace.
Kaieteur News reported that the Guyana Government continues to give Exxon permission to operate without full coverage insurance. In February, ExxonMobil announced that it has commenced oil production at Guyana’s second offshore development area called Liza Phase Two in the Stabroek Block.
With production commencing in Liza Phase Two in the Stabroek Block, along with the Liza Phase One Project, this has brought the total production capacity to more than 340,000 barrels per day (bpd).
Importantly, the government allowed operations to commence in the absence of full coverage insurance to cover costs associated with an unmitigated oil spill or similar environmental disaster. This means that Guyana’s pocket would bleed tremendously if an oil spill or any other disaster should occur at any of ExxonMobil’s approved projects.
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