Exxon: As more oil projects come on stream US$600M insurance remains same

May 29, 2026 News

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…says US$2B guarantee still lodged with Govt.

(Kaieteur News) – As Guyana brings more Floating Production Storage and Offloading vessels (FPSOs) to increase the nation’s generation capacity, the country has been stuck with a US$600M insurance from the operator in the event an oil spill occurs.

The limited insurance remains a major cause for concern for Guyanese and Caribbean citizens alike- a matter that was landed in the local courtrooms. While the High Court ruled for ExxonMobil to provide the country with an unlimited oil spill guarantee, the Appeal Court later overturned that decision.

Consequently, Guyana’s US$600M insurance remains in place along with a US$2B affiliate company guarantee.

Notably, Exxon wholly owns the company that is providing insurance coverage to Guyana as was previously highlighted, creating further tension about the financial protection and its likely availability in the event of a disaster.

Since the startup of oil and gas production in December 2019, Exxon has maintained its subscription to the limited insurance coverage with Ancon Insurance.

Between 2019 and 2026, the company’s operations have grown from 120,000 barrels daily to a whopping 920,000 barrels daily.

During a recent engagement with media operatives, President of ExxonMobil Guyana Limited (EMGL), Alistair Routledge admitted that the US$600M insurance remains stagnant, with the same conditions remaining in place.

He explained, “On insurance we continue to maintain our insurance policies in place as required under the Environmental Permit and meeting all those obligations, so no change on that front.”

When asked specifically if the figure remains the same, Exxon’s Country Manager added, “So there are different elements- there is the insurance the US$600 but then there is also the guarantee from affiliated companies or from corporate structures, depending on which of the companies you talk to, that number of US$2B is unchanged as well.”

On Thursday, the company confirmed that although the US$2B guarantee was lodged during the Court proceedings as a condition to stay the “unlimited parent company guarantee” ruling, the added layer of financial protection remains in place.

US$2B guarantee exposes ‘full protection’ lie

Exxon casually touts its commitment to take care of an oil spill in the event such a disaster occurs in the 26,800 square kilometers Stabroek Block. The company, whenever faced with questions about the cost of an oil spill assures that it will not walk away from the country but will handle associated cleanup and compensation.

The assurances provided however have been cast aside with the US$2B oil spill Guarantee and Indemnity Agreement superseding all oral statements and prior writings. In fact, the agreement, entered into by the Executive Director of the Environmental Protection Agency (EPA), Kemraj Parsram, explicitly outlines US$2B as the maximum amount to be provided by the Stabroek Block partners collectively.

According to the document, “This Guarantee and Indemnity Agreement constitutes the entire agreement and understanding of the parties with respect to the subject matter and supersedes all oral statements and prior writings with respect thereto; provided that for certainty it is acknowledged by the Beneficiary and the Guarantor that this Guarantee and Indemnity Agreement is not intended to and does not amend any term or provision of the Petroleum Agreement.”

Increased production not allowed

Meanwhile, the document seen by this publication also makes it clear that increasing production on the FPSOs is not allowed.

The affiliate company guarantee, seen by this newspaper, makes it explicit “…the Operator is permitted to carry out the activities authorised by the Environmental Permits in accordance with their respective terms and conditions.”

To date Exxon has ramped up production on all of the vessels approved to operate in Stabroek.

Stringent conditions to access

Perhaps more concerning is that before the Government of Guyana (GoG) touches a penny from the US$2B oil spill guarantee provided by ExxonMobil, Hess and CNOOC, the country will first be required to write each of the three guarantors informing of the company’s failure to meet its legal financial obligations.

The Guarantee and Indemnity Agreement lodged by the Stabroek Block partners on June 9, 2023 states, “In order for the Beneficiary (GoG) to exercise its rights under this Guarantee and Indemnity Agreement, the Beneficiary must provide to the Guarantor at the Guarantor’s address stated in Section 4.4, written notice, signed by an authorized representative of Beneficiary (the “Notice”), of EEPGL’s Default of the Environmental Obligation…”

The notice to the guarantor must detail the environmental obligation(s) that is (are) purported to have been defaulted on, including the legal basis giving rise to the environmental obligation (s) in question; how Exxon failed to satisfy the applicable Environmental Obligation(s) and the unpaid amount for which the company is liable for.

Additionally, the government under the agreement must also notify the guarantor that the oil companies have been advised of its intent to draw the guarantee.

Subsequently, “payment of any undisputed portion of the amount in default” shall then be made by the guarantor within 30 days after receiving the notice from government. This means that the guarantor must be satisfied that the claim made by the government has a legal basis for the oil spill compensation to be released.

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• ExxonMobil Guyana, Guyana Oil, oil insurance, oil spill

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