Exxon US$2B oil spill insurance guarantee must be made public

Nov 14, 2023 ExxonMobil, News, Oil & Gas

…as multiple requests for document ignored – former TIGI President

Kaieteur News – With countrywide protests still ongoing for full protection from an oil spill, by the parent company of ExxonMobil Guyana Limited (EMGL), Former President of the Transparency Institute Guyana Inc (TIGI), Frederick Collins has expressed concerns as multiple requests for the US$2B affiliate company guarantee, ordered by the Appeal Court have been ignored by government.

Former TIGI President, Frederick Collins

Collins in an exclusive interview with this publication on Monday indicated that his lawyers had made a number of requests for the document but those have been ignored. He said they were in the process of taking action for the document to be made available publicly. Collins and another Guyanese citizen, Godfrey Whyte had successfully challenged the lack of a parent company guarantee in the event of an oil spill in the Stabroek Block. The High Court in May this year ordered Exxon to provide an unlimited parent guarantee to protect Guyana from carrying the burdens of any financial liabilities as a result of the company’s activities.

The Environmental Protection Agency (EPA) days later filed an appeal of the ruling. The Government of Guyana (GoG) as well as Exxon has joined the appeal which is still ongoing. In June, the Appeal Court granted a stay on the High Court’s ruling and instructed Exxon to lodge a US$2 billion guarantee while the Court considers the appeal. Currently, Guyana has a US$600M per oil spill occurrence in place, which critics believe is not sufficient to cover a massive event that can occur in the Stabroek Block.

Nonetheless, on June 9, 2023 Exxon lodged a US$2B affiliate company guarantee for oil spills in the Stabroek Block. Despite the announcement being made by EMGL’s Vice President and Business Service Manager, Phillip Rietema and subsequent requests to the government, the document remains behind tightly shut doors.

Collins told Kaieteur News, “We have seen no evidence that the insurance has been effected.” He added, “Justice delayed is justice denied and so this process seems to be taking an eternity and given that top government officials are on record of having assured Hess (ExxonMobil’s Co-Venturer) that production will not be stopped a few months ago, it is troubling.”

He went on to point out that the lack of full liability coverage continues to cause concern for citizens across the country, especially as the government continues to hand out more project approvals in the 26,800 square kilometers block.

Already, five projects have been sanctioned by the EPA with a sixth application currently pending. It must also be noted that two projects are currently operational in the Stabroek Block, Liza One and Liza Two. A third development, Payara is also expected to come on stream before the end of this year.

Collins was cautious in his comments to this publication since the matter is still before the Court, but shared his views on the insurance guarantee being kept secret. He reasoned, “There appears to be an effort to extract as much (oil) as possible without regard to the enforcement of the laws that are supposed to be in operation. This is dangerous.”

The former President of the watchdog body also pointedly noted that he is not calling for the release of the oil spill guarantee provided by Exxon but strongly believes that such a document ought to be made public. He argued, “I believe that such a document ought to be made public. There is absolutely no reason for the government to keep it secret.”

According to him, the matter is a public one which the Court has already ruled on; moreover it is of grave national significance. As such the former TIGI President noted, “One would expect that it is made public. This case is described as a public interest case and one would therefore conclude that the public has an interest in seeing that document.”

Since June 20, 2023, Kaieteur News has been requesting a copy of the affiliate company guarantee provided by Exxon. Subsequent reminders were also sent to a public official who did not respond.