‘Shutdown operations if you must’ ...Int’l lawyer says ExxonMobil must do better by Guyana

‘Shutdown operations if you must’ …Int’l lawyer says ExxonMobil must do better by Guyana

May 30, 2022 News

By Davina Bagot
Kaieteur News – As tensions continue to rise, with just one day left for Government to make use of the Liza One Permit renewal to secure better arrangements for its people, International Lawyer, Melinda Janki has said that the offshore oil and gas operations should be shut down if the company refuses to comply with the laws of Guyana.
In an interview with Kaieteur News on Saturday, Janki, a Guyanese-born Attorney who has succeeded in litigations against the oil company before, argued that the Liza One Permit should not be renewed, as the operations pose grave harm to the environment. Not only that but she also made reference to the miniscule ‘gains’ from the company’s current operations, which far outweigh the damage caused in the same process.

International Lawyer, Melinda Janki

She explained, “Deepwater drilling for oil and gas is extremely dangerous. Everybody knows that. Flaring pollutes the air. Everybody knows that. The Environmental Protection Agency (EPA) has a legal duty to protect Guyana’s environment. The Liza 1 Permit should not be renewed because of the grave harm to the environment.”
Janki argued that the EPA has the responsibility of ensuring that the Environmental Protection Act is enforced, thus safeguarding the environment. In this regard, she said, “If that means shutting down operations, then that is what the EPA must do. The EPA must follow legal process and fulfill its legal duty.”
The International Lawyer, who particularly advocates for the safety of the environment, in a previous interview with Kaieteur News had rhetorically questioned about the benefits oil will bring to Guyana. In her reasoning, she said it does not mean anything, especially when compared to the costs associated with the production of the natural resource.
“You have to deduct from that the money that Guyana spends on oil; GGMC (Guyana Geology and Mines Commission) petroleum department, flights, the cost of implementing the contract etcetera. You have to deduct the money the government has borrowed (such as the)US$50M from the World Bank and which the Guyanese people have to pay back. You have to deduct the medium and long-term liabilities. You have to put a dollar figure on the damage to the environment and deduct that,” Janki highlighted.
She pointed out that one must consider the amount of revenue being generated from the sector and the time period before arriving at a conclusion regarding the benefits of the oil and gas sector in Guyana.
The Liza I Oil field in the Stabroek Block first began pumping oil in December 2019 having found the hydrocarbons in commercial quantities in 2015. The field is being produced by a Floating Production Storage and Offloading (FPSO) Vessel—the Liza Destiny—with an installed capacity of 120,000 barrels per day.
The Permit will expire on May 31, 2022 and so far, industry experts have advised Guyana’s regulator to ensure the document is used to secure a better deal for Guyana. For instance, Tom Sanzillo, Director of Financial Analysis for the Institute for Energy Economics and Financial Analysis (IEEFA), during a public webinar on Tuesday said that the EPA should use the Liza One Permit renewal as leverage to address the numerous shortcomings in the oil contract signed with ExxonMobil in 2016.
He told attendees at the webinar, unless this is done, then the renewal of a permit with no additional restrictions and financial reforms would simply see the renewal process as a rubber stamp arrangement. He posited that if the government fails to change the deal, it would have failed the people of Guyana. As such, he was of the view that Guyana may never see its fair share of earnings from its oil blocks and as such pressed for government to open up its books in order for the people to be able to determine the state of affairs.
According to the IEEFA Financial Analysts, “We are not the only ones saying that this is a bad deal for Guyana” and reminded that stakeholders from around the world have been saying the same thing. With this in mind, he noted that in recent days there are regular announcements made of new discoveries and it is being seen as a positive thing.
According to Sanzillo however, under the present arrangement every time he sees an announcement of a new discovery, to him, that just means the mountain of debt will pile up before Guyana can get more earnings from its oil fields and reminded that with US$75B to develop what is already planned, that would take until 2070 to pay back.
With this in mind, Sanzillo said, “Our concern is that Guyana will never see the revenues it was promised.”