Environmental permits governing Guyana’s offshore oil developments have become stricter since first oil, with expanded requirements for emissions control, monitoring, and financial accountability.
The Liza 1 project, the first commercial oil development offshore Guyana, operated under an environmental permit that initially required standard environmental impact assessments (EIAs), spill response planning, and baseline monitoring.
The permit was modified in 2021 to include stricter flaring rules and emissions reporting requirements. Under the updated permit, ExxonMobil was required to pay for excess carbon dioxide-equivalent (CO2e) emissions resulting from flaring when operations exceed timelines set in the original permit terms, at a rate of US$30 per tonne of CO2e.
In mid-2021, the EPA raised the flaring fee at Liza 1 to US$45 payment per tonne of CO2e for any flaring outside approved circumstances. Then, a renewed permit, issued a year later, set the fee at US$50 per tonne of CO2e.
All subsequent environmental permits reflected the new improvements and learnings of the regulator, adding clearer safeguards for emissions, monitoring, and operational oversight.
The Yellowtail project set a new benchmark for environmental permitting offshore Guyana. According to the EPA, its permit includes superior provisions for insurance, oil spill prevention, and management, as well as mandatory equipment such as blowout preventers and a capping stack to address severe, but unlikely, offshore accidents.
Across these projects, several trends are clear: monitoring and reporting obligations have increased, financial assurances for environmental liabilities have been formalized, flaring and emissions controls have become more detailed, and risk-mitigation equipment requirements have been elevated.
ExxonMobil holds a 45% interest in Guyana’s Stabroek Block. Hess holds 30%, while CNOOC holds 25%. The prolific asset holds 11 billion barrels of oil-equivalent discovered resources, which have formed the basis of growing oil production, currently exceeding 900,000 barrels per day.
