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Norton wants Jagdeo stripped of oil sector responsibility
– flays VP for confusing parent guarantee with insurance for oil spill
Kaieteur News – Opposition Leader, Aubrey Norton has lambasted Vice President Bharrat Jagdeo for displaying what he deemed grave “ignorance” regarding the recent High Court ruling on the parent company guarantee for the Stabroek Block oil operations.
Opposition Leader, Aubrey Norton
Norton was at the time addressing supporters of the A Partnership for National Unity (APNU) on Sunday evening, at the launch of the Georgetown campaign for the upcoming Local Government Elections (LGE). He said that Jagdeo at his press conference on Thursday spoke of “unlimited insurance” whereas the Judge in his ruling made no mention of such a thing. The Opposition Leader explained that there must be a parent company guarantee, and even though there is an insurance policy in place, ExxonMobil must cover the costs which its limited liability company- Esso Exploration and Production Guyana Limited (EEPGL)- will not be able to cover.
Norton said, “he then went and ask, what is unlimited insurance? How you gon calculate the premium for this insurance if there is no oil spill? Well let me say you damn fool, we are not saying anything about premium and it has nothing to do with premium. You have the insurance…we are saying, a spill is likely to cost more. We are saying that if it costs more, the parent company must guarantee they fix it and stand the cost. That is all we are saying so cut out this ignorance.”
He continued, “And he likes to talk about who intelligent and who ain’t intelligent. If he was intelligent, he would know the difference between insurance and parent company guarantee.” The Opposition Leader said he believes Jagdeo would repeat this until he convinces the public that his view is factual. To this end, he urged that the VP should not remain in control of the sector. Norton said, “This man should not be trusted with our oil resources. He wasted billions of dollars at Skeldon, he wastes millions on a fiber optic cable…”
It was reported that Jagdeo said he agrees with Attorney General (AG), Anil Nandlall’s decision to appeal the High Court ruling demanding ExxonMobil’s compliance with the insurance provisions in its Liza Phase One Environmental Permit. The VP said: “we all want to ensure that as a country, in the case of a spill, and hopefully it never happens, that we have adequate resources to cover all of the liabilities associated with that… So, we all want this. But we also can’t be shrill or capricious in our dealings, particularly at the level of our regulatory agencies to get that outcome.”
Jagdeo said it is critical that the government pursues diligently and professionally in its efforts to get insurance coverage that will meet all the circumstances should there be an adverse event offshore. He also said it is crucial for institutions to act in a manner where decisions are not made on the premise of economic nationalism.
Jagdeo also said it is incumbent on the courts to produce judgments that are well reasoned, adding that the EPA’s efforts on securing various forms of insurance in the oil sector should not be overlooked. He also noted that the EPA has so far secured a US$600M insurance package from EEPGL, the premium for which is being paid using revenues earned from the sale of Guyana’s oil resources. If that insurance premium is increased, he said it is Guyana that ultimately pays. He further noted that the EPA can liquidate EEPGL’s assets if needed to cover costs relating to an oil spill. He said the Exxon subsidiary now has US$6B to US$8B in assets based on its balance sheet.
Jagdeo said the foregoing therefore arms Guyana with three mechanisms that can be applied to cover the expenses associated with clean up, restoration and compensation for an oil spill. He also refuted claims or contentions that government should secure unlimited insurance coverage from Exxon. “What would be the premium for this unlimited insurance?” asked the official at his press conference. He said, “There is nothing like that in the world of insurance. You can have coverage but even then, there is a defined risk.” Based on the foregoing grounds, the Vice President is of belief that the recent High Court judgment is therefore flawed and must be appealed by the EPA.
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