Vice President of Guyana, Dr. Bharrat Jagdeo said that it is important for ExxonMobil to meet its obligations in the unlikely event of a spill offshore. However, he argued government will not support a process that damages the country’s investment climate. He made the case for a nuanced approach to treating with Exxon during a May 18 press conference.
A report from The Guardian indicates that the controversy in Guyana has already caused some investors to take pause with respect to the question of financial assurance from Exxon in the unlikely event of a spill. Jagdeo was asked about the apparent concerns of Exxon shareholders about the demand by a court for the company to provide an ‘unlimited’ guarantee.
He said, “Now, if the shareholders don’t invest anymore in Guyana until this issue is clarified, then the entire momentum here gets killed.” He argued that the eyes of the world are on Guyana, and that the decisions it makes can strongly impact investors’ confidence.
The recent ruling is engaging the attention of a number of stakeholders and experts in the oil and gas industry. One expert – Elmer Danenberger, a former United States Department of Interior Engineer said it would “trouble permittees in any industry.”
Jagdeo also argued that there is an environmental lobby working to stop oil production offshore Guyana, and that this lobby may even have influence among Exxon’s shareholders. He has denounced the global anti-fossil fuel lobby, arguing that Guyana must develop its oil resources.
He therefore supports the decision by Guyana’s Environmental Protection Agency (EPA) to appeal the Supreme Court ruling related to the provision of an ‘unlimited’ parent and/or affiliate guarantee from ExxonMobil, to be tapped in the unlikely event of an oil spill due to Stabroek Block operations. The EPA and the government have disagreed strongly with the judgment, arguing that such a guarantee is unfounded.
Exxon has maintained that it and its co-venturers already have adequate and appropriate insurance, and proposed guarantees that exceed industry precedents and potential liability estimates. It said Thursday that the Court failed to account for these.
