Appeal Court confused unlimited parent company guarantee with oil spill insurance – Dr. Vincent Adams

May 13, 2026 News

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…says case has strong chance at CCJ

(Kaieteur News) – Former Executive Director of the Environmental Protection Agency (EPA), Dr. Vincent Adams believes that the recent decision of Court Appeal regarding the request for Parent Company Guarantee (PCG) from US oil major Exxon Mobil in the event of an oil spill in drilling operations offshore Guyana, is due to the court’s misunderstanding of the issue.

The appeal court had unanimously overturned a ruling by high court judge Sandil Kissoon for the parent company guarantee to be provided by the American company.  The decision is rooted in a legal challenge mounted by two citizens for the EPA to require the company to provide the guarantee.

In an invited comment with Kaieteur News, Dr. Adams said it is clear that the Appeal Court confused the call for ‘unlimited,’ PCG with the issue of an oil spill insurance. He explained that the two are “entirely different things.”

He noted that PCG is a separate document; a written commitment by Exxon Mobil, the parent company of the oil subsidiaries operating in the oilfields offshore Guyana that offers the country a guarantee that they take full responsibility and foot the cost of the clean-up in the case of a catastrophic oil spill.

“There is no way that the cost to clean up an oil spill can measure or anticipated by a cost. Oil spills by nature are catastrophic, it could destroy environmental eco-systems not only in Guyana and other nearby territories and it can cost hundreds of billions of dollars and take years to clear, hence the term unlimited is being used to describe the PCG, whereas oil spill insurance is different by nature and definition must be capped by a cost…” he explained.

According to Adams, the two terms were being used interchangeably in the court making it difficult for anyone who does not have a clear understanding of the issue to make a sound judgment. However, the former EPA head believes there is still hope and likely better outcome at the level of the Caribbean Court of Justice (CCJ).

In a letter to the editor published on Tuesday, Dr. Adams explained that as the EPA head who created the PCG policy as the only necessary means to protect Guyana’s interest, he totally disagrees with the decision.

He said “Guyanese and Caribbean citizens must be worried sick about the Appeal Court’s devastating overturn of Justice Sandil Kissoon’s May 3, 2023 sage landmark decision requiring Stabroek Block operator, EMGL to provide a PCG from its parent company Exxon and affiliates CNOOC and HESS to cover all costs related to an oil spill.”

The former EPA head noted that while Exxon unconscionably corrals 86% of Guyana’s God given oil patrimony, the court still chose to exonerate “this filthy rich oil giant from all liabilities.”

He asserted that, “EMGL, and not Exxon, is the sole contractor party to the Production Sharing Agreement (PSA) and all permits; and so, own all of the liabilities despite not having assets to cover an oil spill.”

Consequently, Dr. Adams noted that “in the event of a spill, EMGL declares bankruptcy and Exxon goes scot-free, leaving Guyana holding the bag of financial bankruptcy and environmental catastrophe-unquestionably the trickery behind Exxon creating EMGL to insulate itself from liability; hence, the necessity for originating the PCG to save Guyana.”

He asserted “Exxon would never get away with such a scheme in its home country of the USA; but, as Judge Kissoon wisely puts it “EMGL is engaged in a course of action made permissible only by the omissions of a derelict, pliant and submissive EPA…putting this nation and its people in grave potential danger of calamitous disaster.”

Unfortunately, Dr. Adams explained that it appears that the Appeal Court accepted the nonsensical ghost defence arguments that the word ‘unlimited’ is not in the permits; and that the guarantee should be capped with an estimate.

To support his point, the environmental advocate alluded to the EPA permit clauses 14:1 and 14:10 to support his contention.  In summary, Dr. Adams noted that clause 14.1 mandates that EMGL as the permit holder is responsible for all costs.

“However, if EMGL has inadequate resources to cover all costs “fail to do so”, then 14.10 orders that deep pocket parent Exxon and Co-Venturers are liable for all costs over what EMGL can cover. It is therefore unfathomable how such “unambiguous language” Judge Kissoon’s words could mean anything but an “unlimited guarantee”, since all means no limit. Yes, the term “unlimited” is not mentioned in the permit, but that is ghost argument if the words mentioned mean the same as “unlimited”.

He said “confusingly, the court also found that “while Exxon remains liable for pollution related damages, that liability does not automatically require unlimited financial assurance”, completely ignoring the key operative words “all costs” at Clause 14.10 which could only mean “liability for all pollution related damages”. It begs the question, why were key words “all costs” so visibly omitted from this most consequential finding?”

Further, the former executive director stated that instead of “unlimited guarantee”, the ruling required an estimate of the damage as financial assurance, hinting that the court may have been terribly misled that such an estimate is possible or ever done. Whosoever could do such an estimate has to be a fortune teller and should immediately purchase a lottery ticket.”

Dr. Adams noted too with Guyana at its tender age of policy and law making for this critical oil sector, consequential decisions such as this ruling must be informed by the numerous bad lessons learned from other countries.

He said, “A case in point is the litigation in the British Courts involving Nigerians suing Shell Oil Co. for costs covering oil spills in Nigeria; but, because of the absence of a PCG, Shell’s defence was that the spills occurred under their subsidiary company as their operator, making Shell not liable…”

He continued “Repsol which operates in Guyana, was responsible for a small 12,000 barrels oil spill in Peru; and absent tight liability laws, the government was forced to seize the passports of Repsol’s Executives and sued the company for US $billions for cleanup and other liabilities, in addition to urgently establishing new laws to protect Peru from recurrences of this kind.”

In Guyana’s case, Dr. Adams noted that the whole crux of the matter flies in the face of Guyana’s sovereignty at this time of the nation’s momentous 60th independence anniversary celebration.

“Exxon is being enabled by authorities to evade its moral and financial obligation to bear all costs of spill damages occurring from operations earning it $trillions, while cold bloodedly exposing to financial and environmental ruins, the poverty-stricken country that generously furnishes its wealth.”

He noted however that it must not go unnoticed that Exxon had willingly agreed to sign and honor the PCG language first enshrined in the yellowtail exploration well permit in 2019 and repeated in all of the subsequent permits thereafter.

“It only became an issue when the PPPC took office and sided with Exxon to negate it, resulting in the lawsuit by the two patriotic citizens that has brought us to this point.”

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• Appeal Court, Dr. Vincent Adams, EPA, nsurance, oil spill

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