Exxon board members misled shareholders into believing thorough study on oil spill devastation to 12 Caribbean countries from Guyana was done

Jul 31, 2023 News

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Kaieteur News – Shareholders of ExxonMobil Corporation in May this year submitted a Resolution to the company, seeking its support for a thorough assessment to be conducted of the devastation likely to be caused from a spill in Guyana to 12 Caribbean islands.

The Board members however urged the shareholders to vote against the resolution, urging that the likely impacts are already known and are compiled in the Environmental Impact Assessments (EIAs) conducted by the operator of the Stabroek Block, Esso Exploration and Production Guyana Limited (EEPGL).

In their petition for an ‘Additional Report on Worst-case Spill and Response Plans’ Mercy Investment Services, Inc, pointedly noted that “ExxonMobil operates one of the largest oil plays discovered in the past decade, offshore of the South American country Guyana.” Moreover, it highlighted that after discovering oil in 2015, development proceeded rapidly, with production commencing in 2019, with capacity expected to exceed one million barrels per day (bpd) by 2030.

Of specific concern to Mercy Investment Services Inc is the fact that production has peaked above the safety threshold at the operational projects in Guyana’s Stabroek Block. It was keen to note that, “Caribbean countries rely on tourism and fishing industries to support their economies, yet ExxonMobil’s Environmental Impact Assessment (EIA) characterizes residual risk to employment as minor and assumes that a large oil spill is unlikely.”

To this end, the Shareholders requested that the Company issue a report evaluating the economic, human, and environmental impacts of a worst-case oil spill from its operations offshore of Guyana. It noted that the report should be prepared at reasonable expense, omit proprietary or privileged information, and clarify the extent of the Company’s cleanup response commitments given the potential for severe impact on Caribbean economies.

Even though such a document has never surfaced in Guyana, the Board of ExxonMobil urged its Shareholders to vote against this resolution as it claimed such details were already established.

The Board said, “The information requested by the proposal is already publicly available in published reports prepared by the Company and credible third-party experts, as mentioned to this proponent during our engagement. This includes multiple Environmental Impact Assessments (EIAs), the Oil Spill Response Plan for Guyana Operations (OSRP), and other publications and filings that are available on our website and the website of the Guyana Environmental Protection Agency (EPA) as part of the legally required permitting process.”

It therefore discounted the proposal as redundant and unnecessary. In a bid to convince the Shareholders to vote against the thorough assessment, the Board pointed out that prior to exploration activities in Guyana, the company developed detailed emergency preparedness and response plans, including the OSRP.

The Board explained during its 2023 Annual Shareholders Meeting, “Given the comprehensive materials that are publicly available on our website, including our preparedness plan and the EIAs (Environmental Impact Assessments) related to our Guyana operations, creating an additional report as requested by this proposal would place an unnecessary administrative burden on ExxonMobil, be wasteful of the Company’s time and resources, and therefore is not in the best interests of shareholders. For the reasons stated above, the Board recommends a vote against this proposal.”

The proposal by Mercy Investment Services Inc was defeated as a majority of the Shareholders voted against the Motion.

A recent Impact Assessment conducted by Exxon showed that an unmitigated oil spill can reach Trinidad and Tobago, Aruba, Bonaire, and Curaçao, Grenada, St. Vincent and the Grenadines, St. Lucia, Martinique, and Barbados as well as Dominican Republic, Haiti, and Jamaica.

The document explained, “An unmitigated oil spill from either of the loss-of-well-control events during both modeled seasons is expected to travel in a west-north-westerly route through the Gulf of Paria and the southern and eastern coasts of Trinidad and Tobago. This scenario would expose the northern coast of South America and the southern Lesser Antilles to the bulk of the exposure to oiling.”

Even though the document highlights the potential danger these countries face, the level of economic devastation that can be caused was never assessed by the oil giant.

Financial Analyst at the Institute for Energy Economics and Financial Analysis (IEEFA), Tom Sanzillo had said more than US$140 billion of economic activity annually could be at risk. He pointed out that the islands located within the path of a potential oil spill from the Guyana project produce more than US$140 billion of economic activity annually, largely based on the maritime and tourism sectors. He alluded that these countries such as Trinidad and Tobago, by virtue of the source of such revenues cited, face financial risks from an oil spill in Guyana.

It must be noted that even though 12 Caribbean islands could be impacted by an oil spill in Guyana, the current US$2billion company guarantee from ExxonMobil provided to Guyana does not consider ensuing liabilities of potential impacts on Caribbean territories. This was confirmed by President of ExxonMobil Guyana, Alistair Routledge at a press conference in May this year.

The company was ordered by the Court of Appeal to provide the country with that guarantee, pending the outcome of a matter filed by two citizens seeking full liability protection for Guyana and the Caribbean in the event of a spill.

 

 

 

 

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• Caribbean, ExxonMobil, misled, shareholders, spill, study

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