Exxon assures US$2B guarantee was lodged

Feb 08, 2024 News

– says up to court to decide whether it should be made public

Kaieteur News – While Guyanese remain anxious about whether a US$2 billion oil spill guarantee ordered by the Court has been provided by the operator of the Stabroek Block, ExxonMobil Guyana Limited (EMGL), the company has assured that the document has been lodged. However it said it is up to the court to decide whether it must be made public.

ExxonMobil Guyana President, Alistair Routledge addressing the media during Tuesday’s press conference

On Tuesday, EMGL held its first press conference for 2024 at its Duke Street, Kingston, Georgetown office where Country Manager, Alistair Routledge was asked by this publication why the company has been hesitant to share the guarantee it has lodged. The US$2B oil spill guarantee was ordered by Justice Rishi Persaud, as the Appeal Court continues hearing the case for full liability coverage to protect Guyana financially from costs associated with a spill, since many experts have warned this can bankrupt the nation.

Litigants Frederick Collins and Godfrey Whyte had secured an unlimited parent company guarantee from ExxonMobil to cover costs the US$600M insurance would not meet. The ruling was however challenged by the Exxon and Guyana’s Environmental Protection Agency (EPA).

Lawyers for Whyte and Collins had made several attempts to view the guarantee reportedly lodged. Following failed attempts, they approached the Court for the release of the document. Routledge said on Tuesday, “On the guarantee, we had worked the guarantee in advance of the actions that took place in Court and so we were ready as soon as the Judge signalled that a guarantee that had a value on it is what was required then collectively ExxonMobil, Hess and CNOOC had our guarantees ready to meet our $2B commitment and that’s what we lodged.”

He added, “To the question of should those be shared, I think it’s under Court review, its subjudice and I don’t think it’s appropriate for us to comment on that. The EPA is the Authority, they can tell you whether what we submitted meets the requirements and I believe they have said that.”

The Exxon official told reporters that the company did “a huge amount of work” with the EPA to understand the potential cost associated with such an incident. As such, he questioned the grounds for an unlimited guarantee. Routledge said, “Fundamentally that was the issue with an unlimited (guarantee). What does unlimited mean? What really are you trying to cover and if you don’t know what that is, how do you ensure that the entity that is providing the guarantee can actually provide that kind of guarantee?”

Though stakeholders argue that an unlimited guarantee is merely a signed letter from the parent company that explicitly states Guyana will not be left on the hook for any costs associated with a spill, Exxon’s Guyana President noted that “guarantees don’t come without a cost” and an unlimited guarantee has a very high cost.

While Exxon’s priority according to him is to ensure these events never occur, it stands ready to deal with any situation.

Consequently, he said the Court, EPA and other experts should make a determination on whether or not the guarantee should be shared publicly.

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court, ExxonMobil, guarantee, oil, spill

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