Exxon ordered to lodge USD$2B security deposit within 10 days

Jun 08, 2023 News

– Until full appeal over financial assurance for an oil spill is heard

Kaieteur News – Judge Rishi Persaud has put on hold the suspension order issued against ExxonMobil Esso Exploration and Product Limited (EEPGL) to cease operations until the hearing determination of the full appeal case.

Justice Rishi Persaud

In the interim the Judge also ordered that the oil company provide a USD$2B security deposit within the next 10 days or the stay of cease order will be lifted and the company’s permit to conduct drilling activities within Guyana’s lucrative Stabroek Block will be suspended.

The appeal case is premised on an application filed in the High Court on September 13 by Attorneys Seenath Jairam, SC, Melinda Janki, and Abiola Wong-Inniss. In the case, Guyanese activists, Godfrey Whyte and Frederick Collins said that their resort to the court is to make sure that the company takes full financial responsibility in case of harm, loss, and damage to the environment.

They noted that “an oil spill would be devastating for our country and Region as many Guyanese and Caribbean peoples depend on the ocean for their livelihoods. That is why we have decided that the time has come to take matters to the court for relief.”

The Judge’s decision comes days after the Environmental Protection Agency (EPA) joined by the oil subsidiary approached the appeal seeking a stay of the a order to suspend the company’s permit to operate for failing to provide a parent company guarantee which will safeguard Guyana against the dangers of an oil spill.

The order was granted by High Court Justice Sandil Kissoon who handed down a strongly worded decision as to why the oil subsidiary must provide adequate financial assurance by its parent company Exxon Mobil to cater for all the damages to the environment in the event of a blowout or massive spill in the Guyana oil field.

According to Justice Kissoon, the EPA as the statutory regulatory body failed to enforce condition 14 of the permit which it granted to the oil subsidiary, Esso which stipulates the need for an unlimited liability Parent Company Guarantee Agreement and/or unlimited liability Affiliate Company Guarantee to cover and keep protected the Government of Guyana and the Agency against all such environmental obligations within the Stabroek Block, together with Environmental liability insurance as is customary in international petroleum industry in accordance with the conditions listed in the permit from an insurance company standing and repute that equates to Grade A Plus as envisaged by Condition 14:05 of the permit. A failure to comply with the order, the judge said would have resulted in the permit being suspended.

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Court of Appeal, ExxonMobil, Judge Rishi Persaud, oil spill, operating licence, Parent Company Guarantee

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