Justice Kissoon’s ruling should be put in place

May 06, 2023 Letters

Dear Editor,

Kaieteur News – The recent news on the ruling by Justice Kissoon and the opinions of the Government and The Opposition provide insight on how we may create a win-win outcome. The best practices of the oil industry, as it pertains to insurance, continue to be a moving target that keeps requiring an increase in coverage as the track record of the industry continues to show the significant detrimental impact of an oil spill. The frequency and severity of which has made it more evident that a change in coverage is necessary.

It should also be remembered that the updated proposed PSA for future suppliers does leave a gap in coverage as stated in section 3.1 (e) (g) Insurance and Losses, “Costs, losses and damages incurred to the extent not made good by insurance, are recoverable”. The insurance industry can provide a risk estimate based on current and projected operations, which will be used to propose coverage options and the associated premiums. This step is necessary, and Exxon must provide the country with an outline of what this will look like. Based on the nation’s desire to have full coverage that will not put us at risk of bankruptcy, we should clearly understand the financial impact of putting in place Justice Kissoon’s ruling. His ruling will also close the gap in the current and future PSAs. This is the best option before us, and it will also ensure that the sector’s suppliers place an increased focus on continually improving their operations.

It should also be noted that currently in the agreement, we are paying for the assets, which will be relinquished to us at the end of the agreement. We should consider altering the agreement to have Exxon keep the assets and remove the cost burden from our profit and loss statements. This will free up funds to help cover the additional insurance cost, while also reducing the future burden on the country if a spill was to occur after the assets are relinquished. We are not experts in the operations of the industry, nor should we seek to be. Our strength and development must first be focused on the management of the industry and its suppliers.

Best regards,
Mr. Jamil Changlee
Chairman
The Cooperative Republicans of Guyana

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