Speaker weakens Opposition’s Motion on full coverage insurance

Mar 15, 2022 News

---

By Davina Bagot

Kaieteur News – Several clauses in the Opposition’s Motion on full coverage insurance, submitted to the National Assembly, have been subjected to changes by Speaker Manzoor Nadir while most have been removed altogether.

On Monday, this newspaper spoke with the Shadow Oil and Gas Minister, David Patterson who had submitted the Motion, seeking full coverage insurance of Guyana’s oil activities, to Parliament on February 16, 2022.
The Speaker in a written response to the Member of Parliament (MP), dated February 28, 2022, informed that 13 of the 20 clauses in Patterson’s Motion have been disallowed, while two of the ‘whereas’ clauses were also amended.
On the other hand, the Speaker also suggested that Patterson reword one of his clauses as the information included was “inaccurate”.
The Speaker’s response was sent by the Clerk of the National Assembly, Mr. Sherlock Isaacs. In the document seen by Kaieteur News, Isaacs particularly stated that the 1st, 2nd, 4th, 7th, 8th, 11th, 12th, 14th, 15th, 16th, 17th, 18th and 19th ‘whereas’ clauses were removed.
The second clause, in the insurance Motion states, “And Whereas worldwide offshore oil production operations show a high likelihood of an oil spill occurring offshore Guyana, and that such likelihood of a spill increases exponentially with the rapid increase in offshore production activities” and the fourth clause read, “And Whereas the emergency response and cleanup of the British Petroleum Macondo oil spill in the Gulf of Mexico have so far cost more than $70 billion USD.”
Even though these details have been widely reported on, and are moreover available for verification through quick research, these clauses were removed as the Speaker concluded they must be based on facts.
The removal of these clauses means that they will not be debated in the National Assembly.

With regard to the clauses amended by the Speaker, this newspaper understands that the sixth and seventh clauses have been adjusted, although the Speaker said it was the “fifth and sixth clauses”.
The document from the Clerk of the National Assembly detailed, “Further, the Speaker has amended the 5th ‘And Whereas Clause’ by deleting the words, ‘and economic bankruptcy’. He has approved the other part of the clause.”
However, it was Patterson’s clause six, which sought to highlight and discuss the potential financial impacts an oil spill can have on Guyana, by specifically describing the effects as leaving the country in economic bankruptcy.
According to clause six, “…a major oil spill offshore Guyana would result in the environmental devastation of Guyana and its neighbouring countries, obliteration of the areas fishing industry, aquatic vegetation, and economic bankruptcy, including possible lawsuits from neighbouring countries.”
Clause seven, which was also adjusted, said “…the Liza 1 Permit signed by the current PPP/C appointed EPA Head (Mr. Kemraj Parsram) and issued in June 2017, designates as Permit Holder – Esso Exploration and Production Guyana Limited (EEPGL), a subsidiary Limited Liability Corporation (LLC) of parent companies, ExxonMobil, Hess and CNOOC.”
The Speaker has, however, removed the part of the MP’s Motion that said Parsram was appointed by the present government.
Clause nine was also ‘reworded’ by the National Assembly.
Patterson in a brief comment to this publication said he is expected to submit his response to Parliament today (Tuesday). He explained that while his original intent was to submit the facts to defend his clauses thrown out by the Speaker, he has instead settled to raise all the points omitted during the debate.
He said, “I completely disagree with their removal, I am unsure where or whom the Speaker gets his references, however in preparation for my Motions, I consult widely with experts in the field, also I make reference to widely quoted material in the public domain.”
Further to this, he argued that if the Speaker claims that the clauses were not factual, it is the government that would have to prove this during the debate, by producing evidence to contradict the information presented.
“It is my opinion that the place for facts should be on the floor of the Parliament, not the Speaker’s office,” Patterson reasoned.
The Opposition’s Motion on full coverage insurance is calling for the Government of Guyana, to include full unlimited liability coverage for oil spills and other disasters related to petroleum production, as a condition for granting approval for ExxonMobil’s fourth project, the Yellowtail development, and all other future petroleum development.
It is also seeking an independent analysis on the possible ill effects of an oil spill and for this report to be submitted to the Parliamentary Committee of Natural Resources, to be used as a reference for all other future oil development submissions.
This newspaper’s publisher, Glenn Lall, has been championing the call for ExxonMobil to provide full liability coverage in the event of an oil spill.
Guyana’s insurance
Since 2015, ExxonMobil Corporation, the parent company of Esso Exploration and Production Guyana Limited (EEPGL), 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, its subsidiary (EEPGL) will be officially 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.
After persistent calls for the parent company to insure Guyana with full liability coverage, ExxonMobil on February 28, last, in a statement to the press, said it wished to categorically state that it has insurance coverage that meets international industry standards for all of its petroleum activities in Guyana.
Furthermore, it related that “Commentary on full coverage insurance and guarantees inaccurately suggest that ExxonMobil Guyana will not be able to effectively manage response activities. Insurance is just one source of financial assurance that could be leveraged for response activities. The value of insurance will not limit the company’s ability to respond to an event, and response activities would certainly not be delayed by discussions with insurers. We have the financial capacity to meet our responsibilities for an adverse event and we are committed to paying all legitimate costs in the unlikely event of an oil spill.”
On this note, Exxon explained that its subsidiary, EEPGL, the Operator of the Stabroek Block, was established since 1998, and had, as of year-end 2020, almost US$5B in assets, which is a primary form of financial assurance.
The oil company was keen to note that this is separate from the assets of the other Stabroek Block co-venturers who also have substantial assets and share any liability for response activities.
In addition, Exxon said it was working with the Environmental Protection Agency (EPA), and its co-venturers, to put in place a combined US$2B of affiliate company guarantees.
While the US oil giant has boasted of its assets and abilities, the costs related with a clean up after an oil spill could devastate the country economically.
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 was still grappling with the clean-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.

 

---

---