Liza 1 Permit renewal – shutdown only as last resort of last resorts

May 31, 2022 Editorial

Kaieteur News – All Guyanese should know by now that the Liza 1 Permit renewal expires at midnight tonight. The call as conveyed by a headline of ours is sharp: “‘Shutdown operations if you must’ -Int’l lawyer says ExxonMobil must do better for Guyana” (KN May 30). We at this publication understand the thinking behind such a position, but only as the last of last resorts. We must get better and the Liza-1 Permit renewal represents such an opportunity for leaders to press Exxon.
Indeed, International Attorney, Ms. Melinda Janki, has made it clear that her focus is on Guyana’s environment. She made no bones about her position on the dangers of deep-water drilling, and the contaminations of flaring gas into the atmosphere. In addition, Attorney Janki noted that this country’s “Environmental Protection Agency has a legal duty to protect Guyana’s environment.” She went further with a firmer recommendation, which is that “The Liza 1 Permit should not be renewed because of the great harm to the environment.” Last, she pulled all the stops out, “If that means shutting down operations, then that is what the EPA must do.”
Exxon has played hardball with the interests of Guyanese, which has hurt us, starting with the environment. Thus, if circumstances necessitate that Guyana has no option but to pause the company’s operations, then this is what the EPA must have the guts to do for the security of Guyanese. Exxon is a hard charging corporate power, and we must show that we can be hard charging also.
The deep-water drilling and gas flaring that damage the air are not one, but two Achilles heels for the company. Our EPA must aim for those vulnerable cracks in the company’s armour and let fly with its best ammunition. This is not the time for Guyana’s EPA or leaders to get squeamish, as we are fighting for our rights on our own terms. It is do business in this clean way, or let there be a pause in doing business here. The headmen of Exxon must come to the realisation that we are serious, and will stand our ground. The EPA must not flinch before the task that is at hand while using to the maximum the cards that are in its hands.
Since others are talking about contract sacredness, and the company appears to be balking, then we have to use what we have, and proceed from there. It is fix these things to our satisfaction, or get ready to holdup oil operations. It is put up (as we demand) or shut up (as in be ready for the slowdown in operations coming). Instead of arguing about Exxon’s infallible powers as vested in its lopsided contract, then let us all zero-in on the exposures that Exxon has created for us, and now for Guyana to turn around and take those exposures and push leaders to exploit them.
Given the Machiavellian nature of our political leaders, it is astonishing that they have not sensed any opportunity to get creative and pile intense pressure on the stubborn company. It is either that, or they are so prostrate before Exxon due to being compromised by it, that it can’t do anything but surrender. For the enlightenment of Guyanese, we revisit what the Russians did to Shell, an oil major, over Sakhalin.
The original PSA signed by Governor Farkhutdinov exempted Shell from taxes, but not from environmental laws, which the angry Russians exploited to their advantage, through using its EPA that had sat on its hands. Oleg Mitvol, the Russian EPA’s deputy director was handed the job to teach Shell a hard lesson. Suddenly Greenpeace, Russia’s Environmental Watch, and Russia’s agent at the World Wildlife Fund all appeared and had concerns about rivers, grey whales, and so forth. Russian courts ordered Shell to cease damaging the environment and about 50 sets of people came out of nowhere to rail against Shell’s negative conduct at Sakhalin. Eventually Shell capitulated.
The lesson for Guyanese and foreign oil companies is best expressed by Oleg Mitvol: “we want international investment, but we don’t want to be made into a banana republic.” This is where Guyana and its EPA must be with Exxon and the Liza-1 Permit renewal.

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