Speaker wants evidence that an oil spill can leave Guyana bankrupt

Mar 16, 2022 News

Kaieteur News – The Speaker of the National Assembly, Manzoor Nadir, has made it clear to Opposition Member of Parliament and Shadow Oil and Gas Minister, David Patterson, that his Motion on full coverage insurance has been reduced as it is not based on facts.

Speaker of the National Assembly, Manzoor Nadir

In fact, the Speaker is reported to have also told Patterson that evidence must be provided to the House, to substantiate the claims he made in his Motion 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.
The Motion 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, among other things.
It was submitted to Parliament by the former Infrastructure Minister on February 16, 2022 and was later responded to by Clerk of the National Assembly, Mr. Sherlock Isaacs on behalf of the Speaker, on February 28.
In the letter seen by Kaieteur News, the Clerk said, “His Honour the Speaker has asked me to remind you that preamble clauses must be based on facts and has therefore disallowed the 1st, 2nd, 4th, 7th, 8th, 11th, 12th, 14th, 15th, 16th, 17th, 18th and 19th ‘whereas’ clauses And Whereas Clauses.”
Patterson said the Speaker is requesting that evidence be submitted by him to establish his points highlighted in those removed clauses.
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 reads, “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.
When this publication queried from Isaacs the reason the clauses were thrown out, he reminded that the Speaker has the authority to do so, without offering an explanation.
He said, “The standing orders give the Speaker the right to alter any Motion or question without giving the member or members a reason.”
But, when pressed further by this publication to explain why these specific clauses were removed since they can be verified easily, the Clerk reminded that it was the Speaker who made the decision, using his authoritative seat.
This newspaper was unable to get the Speaker to respond, as it was told he was out of the country on official duties.
It must be noted that removal of these vital clauses from Patterson’s Motion mean that they will not be debated in the National Assembly, once it reaches the order paper.
A total of 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”.
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.”
Before the adjustment was made, the clause stated, “And Whereas 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.”
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.
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.
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.
Meanwhile, a United States news agency, NOLA.com, reported in 2020 that more than $71 billion has been spent for clean-up activities, following the British Petroleum (BP) Macondo oil spill in the Gulf of Mexico. https://www.nola.com/news/business/article_ca773cc0-80f4-11ea-8fbe-ffa77e5297bd.html
The report said that the vast majority of the tab – about $69 billion – has been picked up by BP, while the remainder has been split among Transocean, which owned the Deepwater Horizon, and BP’s drilling partners, Anadarko and MOEX.
However, BP’s tally could still rise. A number of large business claims are still pending in federal court. The company’s settlement with individuals who filed medical claims immediately after the accident requires BP to pick up costs well into the future. And more recent lawsuits filed by hundreds of individuals with late-occurring health effects are still pending.
BP also agreed to pay $4.9 billion to five states over 18 years for economic and other non-natural resource losses, and another $1 billion for claims of more than 400 local government entities.
The oil company, British Petroleum, had a blowout a mile under water, which sent oil and gas surging up to the Deepwater Horizon exploration rig, setting it on fire, sinking it and even killing 11 crew members.
The well leaked for 87 days, pouring at least 3.19 million barrels of crude oil into the Gulf of Mexico.