Capping stack and uncapped coverage

Jul 17, 2024 Editorial

Kaieteur News – The arrival of the capping stack facility is a good one, a boost to the management of a big blowout at the offshore oil operations. It should help to allay to some extent the anxieties of Guyanese. But is the presence of that formidable looking three-headed capping stack equipment the end of the safety concerns of Guyanese? Shouldn’t there be more of a comforting backup, the additional contingency precaution of that still absent, still resisted, full parent company guarantee in the event of a catastrophic oil spill? It would be more appropriate, considering the magnitude of what is involved, what could be the consequence, to stop talking about spill and start using the word blowout, as in an uncontrolled one.

Uncontrolled blowout puts the issue in its proper place. It does justice to the anxieties of Guyanese, who are worried about the economic fallouts and impacts on their lives. And uncontrolled blowout demands of ExxonMobil that it completes the circle of protection for Guyana by providing the missing and resisted full (unlimited) parent company guarantee in the event a disaster occurs at one of the company’s offshore wells. It is imperative that the PPP/C Government’s leadership boldly works to wring the necessary full (unlimited) parent company guarantee from ExxonMobil. If this American oil superpower is a genuine partner of Guyana, then it would cease its self-serving objections and furnish Guyana with a full or unlimited parent company guarantee.

A capping stack in Guyana is a welcome development. Simply put, a capping stack helps in the control of an oil blowout. The capping stack business came into its own following the Deepwater Horizon disaster in the Gulf of Mexico that is estimated to run into well over US$100B in damages, and as high as US$160B plus when full closure is reached. All things considered and given the runaway pace at which oil production is breaking records at the offshore wells in Guyana, a capping stack is a vital piece of the safety menu that should have been in place years ago. This protective equipment should not have taken so long to arrive here, have been such a stretch on the patience of Guyanese. The delay reveals the true nature of the one-sided relationship between ExxonMobil and Guyana in this fraud called a partnership. As well-received as it is, a capping stack is only one level in the layers of protection that should be. Robust risk management and mitigation measures are others, with consistent and conservative compliance relative to recommended production safety limits being an integral aspect of those measures. These are not just on paper, or part of public lip service reassurances about risk and safety. These are among the components that are followed day in and day out. But as much as they have significant meaning, there is a big hole in the kind of comprehensive oil blowout protection that Guyanese need.

In addition to all the procedural, mechanical, and technical layers of protection that ExxonMobil has in place (and as diligently followed), the backup financial element is conspicuously missing. It is so glaring as to be barbaric. US$2B would be a drop in the bucket should a big blowout occur offshore. ExxonMobil knows this, the PPP/C Government knows this, and the world knows this also. All the men and machinery, all the policies and procedures, could still not be enough. Guyanese urgently need the type of economic cushion and comfort should a blowout calamity unfold at one of those pumps or productions sites 120 miles offshore. In such circumstances, 120 miles away would evaporate before Guyanese know it, with a real whirlwind of a blowout bankrupting this country for generations. The present soothing talk from ExxonMobil and the PPP/C Government’s leadership would mean nothing, still leave Guyanese stranded and endangered and on their own.

There would be a long, drawn-out fight about who was grossly negligent, and how much is fair compensation, as determined by powerful ExxonMobil. Guyana as a nation would be fighting for its survival, with the deck stacked against it. As much as a capping stack protects, a full (unlimited) parent company financial guarantee has its own power as the best protection for Guyana and Guyanese.

Capping stack, company, coverage, guarantee, uncapped

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Capping stack and uncapped coverage

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