Several countries have unlimited parent company guarantees against oil spill, unlike VP Jagdeo, Nandlall’s misleading statements – Fmr. EPA Director, Dr. Vincent Adams

May 01, 2024 ExxonMobil, News, Oil & Gas

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…says present Exxon’s Guyana subsidiary shields HQ from liabilities

Kaieteur News – The Vice President, Bharrat Jagdeo and Minister of Legal Affairs and Attorney General, Anil Nandlall, have in recent days, again gone on the offensive disputing the existence of Unlimited Parent Company Guarantees (UPCG), but according to former Head of the Environmental Protection Agency (EPA), Dr. Vincent Adams, it must be a case of the two being ill-informed.

To this end, Dr. Adams in a recent public missive in addressing the two said, “let them be educated that first, in countries such as the USA, all operations are registered in the names of, and run by the major companies themselves, and not by subsidiaries such as EMGL.”

Further prefacing his argument, Dr. Adams noted that in such cases, the parent company takes on all liabilities and cited “for instance, BP had to carry all liabilities in the Macondo spill. On the other hand, Shell Oil has been fighting an oil spill lawsuit brought by Nigerians, and Shell’s defence without a PCG, is that it is not responsible for its subsidiary under which the spill occurred. I would also advise that the VP and AG stop shooting from the hip and go read that similar UPCG exists in the UK, Russia and Greenland.”

Compounding the situation, Dr. Adams, was adamant that in the absence of an UPCG and not insurance as is being touted, it is Exxon’s subsidiary, ExxonMobil Guyana that signed all of the Permits with the UPCG, confirming their legal agreement with it.

“Further, EMGL formally agreed that operation of Liza 2 will not commence as scheduled in 2022, nor any new permits granted until EPA approves the UPCG letter as to how the three companies Exxon, CNOOC and HESS will share the UPCG liabilities.”

To this end, he reminded that “we were at the final draft of that letter in August 2020, when I was sent on leave and the EPA young outstanding Attorney handling the matter was also terminated. Thereafter, Exxon with backing of the PPP/C Government refused to comply with the UPCG; thus, triggering the lawsuit and the overwhelmingly popular landmark decision by Judge Kissoon.”

Dr. Adams further argues that “The UPCG is necessary, not only because there is no insurance of that size to cover an oil spill, but also because it is a strategy by companies like Exxon to create Limited Liability Company (LLCs) like EMGL to insulate them from all liabilities. Since EMGL signs all documents, it absolves Exxon of any liabilities. I repeat for emphasis that EMGL has little or no assets to cover an oil spill.”

To this end, he was adamant, “Jagdeo continues to pedal his idiocy that EMGL has some kind of fictitious $20 Billion USD in assets which could be seized. The VP should have at least read the Contract to learn that all of EMGL’s “movable, permanent and fixed” assets belong to Guyana, and will be transferred “free of cost”, upon contract termination. Laughably put, he is touting that the Government seize its own assets. My incessant call is still unanswered for the VP to produce the US$20B list of assets that EMGL owns and don’t belong to Guyana.”

According to Dr. Adams, “besides his foolishness about unlimited insurance, Nandlall’s and Jagdeo’s excuse for not having an UPCG, is that it will bankrupt Exxon, signifying that they are more distressed about Exxon’s bankruptcy, but obviously don’t care a hoot about the bankruptcy and environmental and health devastation of their own people and country.”

He further documented that it “the AG and VP are irresponsible not to care about the lessons of the relatively small spills in Peru and Tobago, without UPCG-like coverage.”

To this end, he reminded that in the little 12,000 barrels spill in Peru, the Government had to seize the passports of the company’s Managers and file a lawsuit to recover cleanup costs in the $ Billions USD, followed by legislating new laws.

More recently, in the 50,000 barrels Tobago spill, the Government, Dr. Adams reminded, is left holding the bag, still searching for the liable parties. Compounding the situation further, Dr. Adams said that by tweaking the permit, government is “recklessly fostering a triple whammy.”

He explained that this obtains by government’s exceeding the Environmental Impact Assessment, “prescribed safe operating limits that increases the risks of a spill; tripled the deployment time for the capping stack to 9 days from the 3 days set by the Coalition, allowing for an extra 6-day gushing of oil into the ocean; and at the same time, opposes the UPCG for full clean-up, though enhancing the risk and quantity of a spill.”

Additionally, he reminded that besides a well blow-out, there is a compounded risk of a spill from a ship plying the Caribbean fetching 1 million barrels of Guyana’s oil, daily.

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• Bharrat Jagdeo, Guyana, Russia, UK, Vice President

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