Jagdeo now concerned over lack of adequate insurance in case of oil spill …tellsGuyanese“itshouldhavebeendonealready”

Guyana’sEnvironmental Protection Agency (EPA) has been directed by the administration to get ExxonMobil, along with Hess Corporation both basedintheUnitedStatesof America (USA) and China’s National Offshore Oil Company (CNOOC), to provide a written guarantee for ‘Full Coverage Insurance’for its operations locally

This, in the event of an oil spill in the Stabroek Block,wouldseetheUSand Chinese based parent companies for the local subsidiaries, picking up the tab,shouldtheybeunableto cover the expenses for containmentandcleanupof anoilspillinGuyana.

Atleast,thisisaccording to Vice President Bharrat Jagdeo, who on Friday last during a press conference held at the Arthur Chung Convention Centre, after persistent questioning, finallyconcededthatnosuch arrangement is in place as yet,asituationthatisacause of concern for him also, and notjustthecritics.

The state of affairs obtains, since Guyana has a Production Sharing Agreement (PSA), commonly referred to as the ‘Oil Contract,’ not with the US or Chinese based parent companies but with subsidiaries owned by them and incorporated in Barbados, the Bahamas and theCaymanIslands.

In2016,theGovernment of Guyana inked that arrangement with Esso Exploration and Production G u y a n a L i m i t e d

(EEPGL) ExxonMobil

Guyana which is a subsidiary of the US based Companybutisincorporated in the Bahamas and holds a 45 percent stake in the StabroekBlock.

The other partners with whichtheStateinkeditsdeal, were Hess Guyana Exploration Corporation, a subsidiary of the US based company,incorporatedinthe Cayman Islands and holds a 30 percent stake, along with CNOOC Petroleum Guyana Limited, incorporated in Barbados and holds the remaining25percentinterest

As such, Guyana as a new oil producer in the world,injustafewyearshas moved from discovery to producing in excess of 350,000 barrels of oil daily but the ExxonMobil led consortium operating in the Stabroek Block of the country’s Exclusive Economic Zone, is doing so without a full and comprehensive insurance package, guaranteed by the parent company of those subsidiaries.

The call, has in recent years become even more pronounced, given the quantumofliquidassetsheld by the subsidiaries, which many analysts have rejected as insufficient to meet the expenses associated with cleanupofanoilspill.

According to Jagdeo, that being the case, “I told the EPAto get, they have to get the parent company guarantee.”

He was at the time responding directly to a question that has been repeatedly posed to him by Kaieteur News Publisher and social commentator, Glenn Lall, who sought again, to enquire into the insurance that is to be provided by the parent companies for the oil companies in the Stabroek Block.

The Vice President, having brushed aside the question on previous occasions, finally conceded, “I have expressed concerns myself if you think you’re justconcerned.”

Tothisend,hewentonto speak on capacity building but reiterated, “some of the concerns are also our andinvolvedquantitiesofoil and gas similar that being produced and stored presently in the Stabroek block.

Back in April 2010, a well blowout in the Gulf of Mexico led to just over 3 millionbarrelsofoilandgas being leaked in to the ocean uptotheDeepwaterHorizon Exploration Rig which caused that too to explode and subsequently sank killing 11 members of the crew

That incident saw the hydrocarbons being leaked foralmostthreemonths—87 days to be precise—and has to date, cost that operator to the four developments alreadyapproved. concerns.”

These are the Liza I&II oil fields, currently producing and utilizing the LizaDestinyandLizaUnity FPSOs. A third FPSO is currently enroute to Guyana while the fourth the development of the fourth field is underway The company is at present seeking permission for its fifth and sixth oil field developments in the StabroekBlock.

Another of the costly oil spills experienced in the recent past involved the same company leading the operations in Guyana, ExxonMobil, which in 1989 saw its Valdez super tanker, running aground and subsequently spilling some 11 million barrels of oil off theAlaskanCoast.

It was at the timed deemedtheworstoilspillin US history until the Deepwater Horizon oil spill in2010.

The Exxon Valdez oil slick covered 1,300 miles of coastline and killed hundreds of thousands of seabirds, otters, seals and whales and four decades later, pockets of crude oil remain in some locations. Afterthespill,ExxonValdez returned to service under a differentname,operatingfor morethantwodecadesasan oiltankerandorecarrier.

To this end, he told members of the media, “the parent guarantee should have been done already; it hastobedonesoon,wetold the EPA give this Exxon a deadline, give them a deadline for doing this, it should have been done, that one you [Glenn Lall] are righton.”

The matter has over the years been raised as a cause of concern among many given the cost of not only containing and stopping but cleaning up after an oil spill could in fact cripple the Guyanaeconomy

It would be poignant to note that one of the most expensive oil spills in the world occurred in the USA someUS$70Btocleanup.

British Petroleum was theoilcompanyresponsible.

In the Stabroek Block, thereareatpresentscoresof deepwater wells spud by ExxonMobil Guyana and theirpartnersalongwithtwo Floating Production Storage and Offloading (FPSO) vessels with a combined storage capacity of three millionbarrelsofoil.

ThecargoforeachFPSO is offloaded into oil tankers intermittently This in addition to six drill ships in operationatanypointintime cumulatively poses a threat ofanoilspill.

ExxonMobilGuyanahas in its plans, six more developments in the Stabroek Block, in addition

That disaster would end up costing the company several billions in not only containing and cleaning up the spill but fines and other expenses.

According to resource centre,Statista,therewasan averageof1.8largeoilspills from tanker incidents every yearinthedecadefrom2010 to 2019. In 2022, four oil spillswerereportedinwhich morethan700metrictonsof oilwasleaked.

According to that database, while there has been a decline of the use of tankers in the 1970’s there were often in excess of 20 largeoilspillsperyear

It noted too that with whileoiltankersarethe Continuedonpage71