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Liza 2 Permit never required unlimited parent company guarantee for oil spill- EPA
Kaieteur News- The Liza Two Permit, signed by the former Head of the Environmental Protection Agency (EPA), Dr. Vincent Adams, never required an unlimited parent company guarantee, according to the regulator.
In a statement on Thursday, the agency responded to an article published by Kaieteur News in its December 11, 2024 edition under “Guyana cannot seize and sell its own assets to pay for an oil spill- Dr. Adams.”
Liza 2 Permit never required unlimited parent company guarantee for oil spill- EPA
The EPA said that while Dr. Adams claimed that the operator of the Stabroek Block, ExxonMobil, had in the past agreed to an unlimited parent company guarantee that was reversed by the present administration; these assertions were “inaccurate”.
To this end, the agency pointed out that its records show that the former EPA Head, signed a Permit for the “Liza Phase 2 Development Project – Stabroek Block, Offshore Guyana” on 26th April, 2019. This permit was effective from the date of signature until March 2043 (24 years).
Further, it explained, “Nowhere in the permit signed by Dr. Adams is there any reference to the requirement for ExxonMobil to provide an unlimited parent company guarantee. Instead, the permit states under section 12.5 as follows:
“The permit Holder must, as soon as reasonably practicable, provide from the Parent Company or Affiliate Companies of Permit Holder and its Co-Venturers (‘Affiliates”) one or more legally binding agreements to the EPA, undertaking to provide adequate financial resources for the permit holder and its Co-Venturers to pay or satisfy their respective environmental obligations regarding the Stabroek Block…”
The EPA therefore reasoned that as the former EPA boss, Dr. Adams should be in a position to confirm whether or not there was an Agreement signed by him and ExxonMobil, where an unlimited parent company guarantee was required to be provided. In fact, the Agency invited Dr. Adams to do so immediately.
In the meantime, the regulator said, “The EPA wishes to reiterate that Financial Assurance, as provided for in the Environmental Protection Act Cap 20:05, requires the Agency to set an amount in any form of financial assurance required of any Permit Holder.”
“The Agency has since required that an estimate of the reasonably credible cost for responding to and clean-up of worst-case oil spill be estimated in the case of financial assurance required for oil and gas operators to inform us of an amount to be required,” it added.
(Liza 2 Permit never required unlimited parent company guarantee for oil spill- EPA)
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