ExxonMobil takes care of itself

Sep 08, 2024 Editorial

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Kaieteur News – Under one corporate name or another, ExxonMobil has been in the oil business for over a century.  The multi-national, in some ways the United Nations or World Bank of oil, has compiled an encyclopedia of knowledge and tricks on how best to manage its own interests.  What Guyanese are finding out to their distress is that ExxonMobil strongly sets itself up to take care of its bottom line, with not a penny so small as to be ignored, nor charged back against Guyana’s oil.  Guyanese discovered that in recent completed audits of the company’s expenses, with some findings indicating how ExxonMobil leaves little to go by the wayside, as it bills and collects from Guyana’s oil.  From yoga exercises to fun and frolic to holiday cheer, these were all charged against Guyana’s cost oil.  Now, through the 2016 oil contract, that instrument of darkness and corporate ingenuity, there is confirmation of how ExxonMobil lets no dollar go a begging, with Guyana paying the price even when the company lapsed.

In layman’s terms, ExxonMobil’s 2016 Production Sharing Agreement includes a clause that gives the company several layers of protections.  In what could turn out to be a potential disaster for Guyanese, ExxonMobil was smart and coldblooded enough to give itself the legal grounds to collect back from Guyana’s oil any money that is above the US$600M oil spill insurance that stands. Annex C, Section 3.1 (g) subtitled “Costs Recoverable Without Further Approval of the Minister” states in part: “Insurance premium and cost incurred for insurance…shall be recoverable.” And “Costs, losses and damages incurred to the extent not made good by insurance are recoverable, including costs, losses or damages resulting from the indemnities in Article 2 of the agreement, unless such costs, losses and damages have resulted solely from an act of willful misconduct or gross negligence of the Contractor.”  We cut through the dense construction to assert that these are the lengths to which ExxonMobil goes to look after itself on Guyana’s back.

First, the insurance premiums to protect Guyana should an oil spill occur are recoverable from Guyana’s oil revenues, once it is within the range normally charged by insurance companies not having any relationship with ExxonMobil.  Second, whatever amount is above the insurance coverage in place is also recoverable from Guyana’s oil revenues.  Third, the only time that such costs beyond the insurance maximum are not recoverable is if ExxonMobil is alone responsible for “an act of willful misconduct or gross negligence.”  Of note is that these recoverable costs do not have to be signed off by the subject minister.  It is jaw-dropping, a work of extraordinary corporate cleverness, that ExxonMobil has foisted on Guyana, compliments of a weak and befuddled Coalition Government back in 2016. For the icing, the insurance company is an affiliate of ExxonMobil.  In effect, any necessary payout is under ExxonMobil’s control.  There it stands in black and white, almost 100 percent fool proof. Yet, ExxonMobil calls itself Guyana’s partner, when it is a nothing but a stalker seizing any opportunity to take advantage of Guyana.  In the ExxonMobil-Guyana partnership, the company is fully insulated, while the host country is terribly exposed.

Ordinary felons who can afford competent legal counsel have often escaped the clutches of justice, through technicalities.  They usually do not have the protective armor of a watertight contract such as ExxonMobil has refined and perfected after using it in other Third World countries.  With that 2016 oil contract, ExxonMobil has given itself what is the equivalent of a slave owner’s ropes and whips.  Everywhere that Guyana turns it is cornered with no relief in sight.  Whenever this country thinks that it stands a chance to look after itself, ExxonMobil ensured that it there is language in place that gives it loopholes through which to escape liability.  Courts often have difficulty pinning willful misconduct or gross negligence on regular lawbreakers.  Guyana’s chances of court success against a practiced oil behemoth like ExxonMobil when “willful misconduct and gross negligence” must be proved are next to nil.  Not just misconduct but “willful misconduct” not merely negligence, but “gross negligence.”  In the event of a major oil spill, Guyana is on its own beyond the paltry insurance on hand.

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• Editorial, ExxonMobil, Guyanese, United Nations, World Bank

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