President Irfaan Ail must explain conversation with oil company on stay of Justice Kissoon’s ruling – OWOC group

Jun 27, 2023 ExxonMobil, News, Oil & Gas

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Kaieteur News – The recent comments by John Hess, Chief Executive Officer CEO) of Hess Corporation that Guyana’s Head of State was “emphatic that a stay would be put in place” following the High Court’s Order for Esso Exploration and Production Guyana Limited (EEPGL) to provide an unlimited guarantee from its parent company has sparked concern among Guyanese that the rule of law is under threat.

Our Wealth Our Country (OWOC), an independent organization with hundreds of Guyanese members believes President Irfaan Ali must clear the air on the matter.

Following an article published by Kaieteur News in Friday edition titled ‘Hess Boss tells US conference Pres. Ail assured him of stay in Justice Kissoon’s ruling before Court of Appeal handed down decision’ the CEO of Hess Corporation issued a response. In his bid to clarify the issue, John Hess explained, “I called the President about concerns expressed by investors about the recent court ruling, and the President—based on the advice of his Attorney General—conveyed to me that the State’s case in favor of its application was strong, and based on the merits of the case, there was no reason why a stay could not be granted.”

To this end, the body said the government will now have to explain why the Hess boss told the U.S Energy Conference that the President assured him a stay of the full liability protection ruling by Justice Sandil Kissoon would be issued.

The civil society body said, “OWOC is concerned that the rule of law is under threat if business groups can go to the President directly seeking solace and interventions if they do not like court decisions.”

In calling on none other than President Ali to clear the air on the matter, the group added, “This is quite disturbing, as ordinary Guyanese do not have the privilege of seeking presidential assistance if they do not like court decisions.”

During the J.P. Morgan 2023 Energy, Power & Renewables Conference, Hess Corporation was asked to provide an update on the legal challenge mounted on its Environmental Permit for the Liza One project in Guyana.

Two Guyanese men, Frederick Collins and Godfrey Whyte had taken the Environmental Protection Agency (EPA) to Court, for failing to enforce the requirement of the Liza One Permit for an unlimited parent company guarantee. The citizens were successful in their litigation and the Judge ordered that the guarantee be provided or the Permit would be suspended.

Hess in his full response to the Conference was: “Yeah now first of all, this is something that the government disagreed with. We disagreed with, yeah, had a judge that got a complaint from an environmental activist. I mean, it happens in our country as well, and said, you know, basically the joint venture had to have unlimited liability in terms of the developments, otherwise production had to cease and I can tell you, the President was very emphatic that a stay would be put in place that would have no impact on production. The stay was put in place. There is no impact on production. And I think this is just a case of the judge not understanding what the petroleum legislation was or the petroleum requirements of our production programs were, and I think that matters been put to bed. There was a lot of noise about it, but it was basically noise.”

The comments made by Hess has sparked concern especially when Guyana’s Vice President Bharrat Jagdeo is also on record as saying that rulings by the legal fraternity should be predictable.  Jagdeo was commenting on Justice Kissoon’s May 3, 2023 ruling when he told reporters at a press conference that the judiciary is treading in murky waters by directing a regulatory agency on how to do its job and setting a timeframe on when it should complete orders.

In the judgment handed down on May 3, 2023, the High Court Judge ruled that EEPGL is in breach of its permit which, in the court’s view, unreservedly calls for unlimited insurance protection in the event of an oil spill. The Judge also issued an Order of Mandamus directing the EPA to have EEPGL produce on or before June 10, 2023, the unlimited liability Parent Company Guarantee Agreement and/or unlimited liability Affiliate Company Guarantee from an insurance company with standing and repute that equates to Grade A Plus. Failure to comply will see the permit being suspended.

Kaieteur News previously reported that Exxon and its partners have since lodged a US$2B affiliate guarantee with the EPA as this was a condition of the stay of execution being granted. This complements the US$600M per occurrence insurance policy for the block.  The stay on the High Court’s ruling was granted by the Appeal Court on June 8, 2023.

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