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Jagdeo leads appeal on parent company guarantee to appease investors
Kaieteur News – “Investors spook easily,” says Vice President Bharrat Jagdeo. This is the main reason for the Government of Guyana (GoG) taking the lead on the appeal of a court ruling by Justice Sandil Kissoon, ordering Esso Exploration and Production Guyana Limited (EEPGL) to supply the nation with a parent company guarantee within 30 days, to cover the costs above its limited insurance, in the event of an oil spill in the Stabroek Block.
During a press conference on Thursday at Freedom House, Georgetown, Jagdeo defended the move by government, since he believes this could have a negative impact on the country’s investment climate.
He was at the time responding to a reporter who was seeking clarity on why the government jumped out of its line, before a company, to challenge the ruling in favour of the country; since there is the view that this would be a matter for the private sector to represent itself.
Vice President, Bharrat Jagdeo
According to Jagdeo, it was a “common sense” decision, since “investors spook” easily. He explained, “It’s common sense. Sometimes you have to have commonsense and we believe in leading from the front. We are not the PNC (People’s National Congress). We don’t hide behind private sector or subterfuge to make our positions known, so we want this country to know…they hear from us, it is what we feel and what we will do. We don’t go in the shadow of the night and shout something and then get a third party. It is clear as day.”
He shared the view that such a ruling could have “international consequences”. Jagdeo pointed out that Bloomberg, Reuters and other international agencies have been tracking Guyana’s oil sector almost on a daily basis. The Vice President contended that back in 2005 when Guyana lost over 50 percent of its Gross Domestic Product (GDP), due to the massive floods, this was not a major headline; however stories are now emerging on international platforms more frequently due to Guyana’s petroleum industry.
As such, he noted, “It is naive to think that they wouldn’t pick this up and then investors, that’s how investors are, they spook easily so it doesn’t require great forecasting skills, or to know that that will happen. It’s just that I verbalize it and it did happen, came to past because we are savvy to these things.”
Secondly, Jagdeo said people are asking why the Environmental Protection Agency (EPA) appealed the ruling and not Exxon. To this end, he explained, “It was the EPA that was sued, not the company. The company joined in, The EPA was the only one with the real standing in the matter so Exxon couldn’t appeal the ruling.”
On May 3, 2023, High Court Judge, Justice Sandil Kissoon ruled that the EPA failed to fulfill its statutory duty to protect the country, as it did not enforce the provisions of the Liza One Permit, requiring a parent company guarantee to supplement the US$600 million insurance coverage, per oil spill activity in the 26,800 square kilometers, oil rich Stabroek Block.
He therefore gave 30 days for the company to comply with the parent guarantee provision. A notice of appeal into the decision was filed by the EPA on May 9, 2023. ExxonMobil Guyana has also applied to join the matter.
Appeal Court Justice Rishi Persaud only Monday refused to overturn the ruling of Justice Sandil Kissoon. When the matter was called for case management, attorney for the EPA, Sanjeev Datadin requested a Stay of Justice Kissoon’s Order but his request was bluntly refused. The court also set May 25 for oral arguments. The Court of Appeal intends to apply the merit test to the EPA appeal against Justice Kissoon’s ruling.
In the meantime, ExxonMobil is still expected to provide the parent company guarantee by June 10, 2023.
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