Int’l Lawyer calls for halt in Stabroek Block operations until deal changes

Oct 04, 2022 News

…says Gov’t. should not be begging oil companies to come to table

Kaieteur News – The ‘dangerous’ oil and gas operations in the Stabroek Block, led by oil giant, ExxonMobil, should be shut down pending a credible international, independent investigation. This is according to International Lawyer, Melinda Janki who said during a recent online discussion, facilitated by ‘Globespan 24×7’, that the production of oil and gas should only resume if it is found to be beneficial to the people of Guyana.

International Lawyer, Melinda Janki

Janki explained, “There should be an independent international, credible investigation into those operations and it should only be restarted if it makes sense and it is at that point, in a discussion for restarting, that the people of this country can say well this is what we want instead.”

The Lawyer told listeners that the current Production Sharing Agreement (PSA) Guyana has with Exxon is “one of the most abusive, exploitative deal ever inflicted on a sovereign people.” She was keen to note that while a renegotiation of the contract is possible, Government cannot simply invite ExxonMobil, Hess and CNOOC to the table seeking more money as this would lead nowhere. “This operation should be shut down because I think it is so dangerous,” Janki said.

Former Chief Executive of the Environmental Protection Agency (EPA), Dr. Vincent Adams who was also a panelist on the programme, explained some of the current dangers associated with the oil production activities that currently risks the revenues garnered from the sector.

Dr. Adams firstly detailed that both the Liza One and Liza Two operations are producing crude without proof of full liability coverage, in violation of the Permits granted. This means that should an oil spill occur, Guyana could be left the foot costs above US$600 million, as this is the current insurance offered by the operator. Not only that but he said the Liza One safe operating limit, as outlined in the Environmental Impact Assessment (EIA) is 120,000 barrels per day, however Exxon has increased production to about 150,000 barrels per day without following the procedure for changing the EIA. To this end, Janki pointed out that for the country to have a renegotiated deal it must have something that makes the oil companies do things differently, which at the moment, points to the legal framework.

“Guyana can actually change the conditions under which these companies are taking petroleum out but it has to be done in a way that is within the regulatory framework and is not begging them to come and sit at the table and begging them for more money because they will not give up a single dollar,” she reasoned. The Lawyer went on to highlight that the current Environmental Protection Act has been used in the past by Dr. Adams to rein in the oil companies. To this end, the Lawyer contended, “What I care about is the safety and security of the people of this country. The money is not important because right now, given that operation offshore, the Guyanese people stand to lose far more than they will ever gain from any renegotiation.” For months now, citizens in Guyana have been protesting Government to renegotiate the oil contract with Exxon. In fact, the PPP had promised to ‘review and renegotiate’ the deal entered into by the former Government however, the party has now decided that it must maintain the agreement.

Citizens in Guyana believe that the present agreement only favours the oil company, as Guyana receives a mere two percent royalty for its sweet light crude and settled for 50 percent profit sharing, after Exxon takes 75 percent of the earnings to clear its expenses. The deal that the oil company often brags about to its shareholders, also force Guyanese into paying their share of taxes, amounting to millions of US currency each year. This figure is likely to further balloon too as more operations come on stream. In addition, the country is allowing ExxonMobil to operate offshore without full liability coverage in the event of an oil spill, which means that the risk is borne by Guyana. Another key provision that is lacking in the document is ring-fencing provision, which would avoid the oil company from using the petroleum revenue in one field to cover for expenses in another.