Govt. will take ExxonM to court for compensation in event of an oil spill-Jagdeo tells press conference

Govt. will take ExxonM to court for compensation in event of an oil spill—Jagdeo tells press conference

May 26, 2023 News

Kaieteur News – Over the years, Kaieteur News has highlighted the plight many countries face to get oil and gas companies to compensate them for losses suffered by citizens and damage to their environments due to oil spills.

Vice President Bharrat Jagdeo at his press conference

On the local front, Guyana has been pumping oil since December 2019, in the prolific Stabroek Block. ExxonMobil Corporation’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), is the operator of that block which has an estimated 11 billion barrels of oil.

EEPGL along with its co-ventures Hess Corporation and China National Offshore Oil Corporation (CNOOC) has been operating in the Stabroek Block with a mere US$600 million insurance package given to the country. To complement this, Guyana’s Environmental Protection Agency (EPA) has since agreed to accept a US$2 billion parent company guarantee from ExxonMobil and is poised to receive supporting documents on this front soon.

During his press conference on Thursday, Vice President Bharrat Jagdeo was asked, in the event of an oil spill offshore Guyana, what will the Government of Guyana (GoG) do to ensure that Guyanese do not have to foot the bill. The Vice President responded, “The thing is that, you’re asking me a hypothetical question…” However, he explained that looking at what has happened globally with other countries when it comes to oil spill, most of the US-billions of dollars that countries get are from taking the oil companies to court and winning the case. He continued: “they didn’t come because the companies are voluntary, even in the US (United States of America)…and in the UK (United Kingdom). So I see figures quoted (US) $85B and (US) $50B and if you look at it, it wasn’t for the cleaning up of the spill but the compensation and a lot of those didn’t originate because of guarantees they emerge from court cases.”

Jagdeo also said: “whatever guarantee Exxon gives at the end of the day it comes back to we will pay for it.” The Vice President explained that he expects there would be litigations and that is how he anticipates it would be dealt with. At his press conference, Jagdeo admitted that oil and gas companies are not altruistic. “They are not in this for the good of mankind they are here to make money and it’s as simple as that they come to make money from the country,” he said.

Jagdeo highlighted: “On our own we can’t put together $30, $40B US dollars.” He explained that US$30 billion which ExxonMobil Guyana has already investted in offshore Guyana is six more than what is available in Guyana’s banking system.

The Vice President further explained, “So we needed that to explore these big opportunities so our job is to get investments in but to get a growing share of the pie too and to make sure our people get the possibility of development….”

Just last year, the Peruvian Government had to take Spanish oil giant, Repsol – a company that is also working offshore Guyana – to court for some US$4.4 billion for environmental damages and damages to locals and consumer over the January 15, 2022 oil spill of 12,000, barrels of spill off the court of Peru. African countries, particularly Nigeria have seen their fair share of oil spill litigations which took decades to come to an end and for the citizens to be compensated for the cleanup of their environment and for the disruption to their livelihood.

Government recently appealed the May 3, ruling by High Court Judge Justice Sandil Kissoon who ruled that Guyana’s EPA should secure unlimited parent guarantee from ExxonMobil Corporation for a major oil project producing over 150,000 barrels of oil daily in the Stabroek Block. Vice President Jagdeo had contended that such a ruling could affect investment in Guyana’s oil and gas sector and kill the momentum; as such they appealed the ruling.