ExxonMobil affiliate Esso Exploration and Production Guyana Limited (EEPGL) on Wednesday told reporters that in the very unlikely event a major accident such as an oil spill occurs at the offshore Stabroek Block, the consortium has the technical and financial resources to address it. Furthermore, the company and the Environmental Protection Agency (EPA) are expected to soon finalise an agreement for US$2 billion in affiliate company guarantees.
Vice President and Business Service Manager, Phillip Rietema, spoke to reporters during a special session on the matter, on Wednesday afternoon. The forum was held at the company’s Duke Street, Kingston, Georgetown office.
“We’ve procured industry standard insurance, for the benefit of ExxonMobil Guyana and the co-venturers,” Rietema said. “So, if we have costs associated with an environmental incident, after we pay for those expenses, we could then go to our insurance companies and file a claim against our policy, and they would reimburse us for these expenses.”
He said that EEPGL and its partners, Hess and CNOOC, have insurance for their own benefit. Rietema added that if the consortium does not address all its environmental obligations, there is US$2 billion in affiliate company guarantees for Guyana’s benefit.
“So, if EEPGL, Hess, CNOOC, if we all default, very very unlikely… then we’re also providing guarantees from other companies within our group, that would be for the benefit of Guyana. It’s very close (to being concluded). Very, very soon. Final details are being worked out,” Rietema said.
Kemraj Parsram, Executive Director of the EPA, confirmed to OilNOW on Thursday that the agreement is being finalised.
“We are making good progress and I am aiming to finalise possibly by month end,” Parsram stated.
The agreement is consistent with statements made by Guyana’s Vice President since last November. Dr. Bharrat Jagdeo had told journalists that despite it being understood implicitly that ExxonMobil and its partners would “foot the bill” for any environmental damage, the government was looking to get as much as US$2 billion in assurances.
EEPGL President Alistair Routledge responded last week to claims made by the former Executive Director of the EPA, Dr. Vincent Adams, that he had been able to secure an agreement with the company for insurance covering US$2.5 billion. Routledge had pointed out that no such agreement was ever made.
He said ExxonMobil has almost US$5 billion in assets which serve as a primary form of financial assurance, aside from the assets of the other affiliate companies in the consortium.
Furthermore, he explained that the company’s internationally accepted response mechanisms are in-line with multiple plans and conventions, including Guyana’s very own National Oil Spill Response Plan.
Routledge said however that, as a world class operator, ExxonMobil Guyana utilizes the best technologies, equipment and human resources to put in place mitigations and processes to prevent adverse events and finds the possibility of these happening unlikely.
