Exxon’s 6th project should not be approved without full liability coverage for oil spills - AFC

Exxon’s 6th project should not be approved without full liability coverage for oil spills – AFC

Jan 14, 2024 ExxonMobil, Features / Columnists, News, Oil & Gas

Kaieteur News – Opposition spokesman on the oil and gas industry, David Patterson says Whiptail, the sixth development project being pursued by an ExxonMobil-led consortium in the Stabroek Block, should not be approved by the government without full liability coverage for oil spills in place.

AFC Executive Member, David Patterson

At a recent press conference held by the Alliance For Change (AFC), the politician said categorically that the government’s acceptance of a mere US$2B parent company guarantee for oil spills is tantamount to a slap in the face for Guyanese. He said this is especially the case when one considers that the US$2B would have to suffice for unmitigated spills that occur for any project in the block.

What makes the situation even worse, said Patterson, is that Guyanese have not seen proof that the meager policy is with the Environmental Protection Agency (EPA).

Patterson said, “Granting a licence for the sixth oil project without having full liability coverage, obviously that’s not something we in the AFC support. We have called for full liability coverage since the Liza Phase One Project and onwards…”

He added, “The reality is that the more floating, production, storage and offloading (FPSOs) you bring into operation, the risk of a spill increases proportionately.” Guyana currently has three FPSOs on stream producing just about 560,000 barrels of oil per day. When that increases to six FPSOs in operation, Patterson said the oil spill risk increases by 100 percent.

“Obviously, US$2B for oil spill coverage across those projects is inadequate,” he said.

The opposition parliamentarian also bemoaned the fact that Guyanese are yet to see proof of the US$2B parent company guarantee. “…I can’t see why we have not seen it. Seeing it would demonstrate that the government and Exxon obey the laws of this country as well as the orders of the court,” Patterson said.

Kaieteur News previously reported that two Guyanese who have made numerous requests through their lawyers to see ExxonMobil Guyana’s US$2 billion parent company guarantee. These requests follow on the heels of their initial case filed back in September 2022. In that case, the litigants, Frederick Collins and Godfrey Whyte, pushed for the Environmental Protection Agency to be ordered to secure from Exxon Guyana, an unlimited liability coverage for oil spills. In so doing, Guyana would be fully protected from any hidden costs associated with an unmitigated spill from one or more projects in the Stabroek Block.

On May 3, 2023, High Court Judge, Justice Sandil Kisson ruled in favour of the litigants and ordered the EPA to secure an unlimited parent and/or affiliate company guarantee for oil spills. To circumvent compliance with that order, Exxon and the EPA through their lawyers, appealed and were successful in staying Justice’s Kissoon’s decision. Pending the final outcome of the appeal, Justice Persaud ordered Exxon to lodge a US$2 Billion parent and or affiliate company guarantee.

Since that order was issued on June 8, 2023, the litigants said their lawyers which include Seenath Jairam SC, leading Melinda Janki and Abiola Wong-Innings have been unable to secure a copy of the said guarantee for perusal.

The litigants are now going through the courts for a summons to see the US$2B guarantee. The hearing on that matter will be heard this week.