Guyana pursuing ‘full indemnification’ in insurance agreement with Exxon – EPA Chief

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As Guyanese await the completion of an agreement to strengthen insurance guarantees from ExxonMobil, Executive Director for the Environmental Protection Agency (EPA), Kemraj Parsram told OilNOW that “full indemnification” is being pursued.

He said ExxonMobil affiliate, Esso Exploration and Production Guyana Limited (EEPGL), has presented a draft of the agreement which the EPA is now reviewing.

“We went through it and there are a few conditions or clauses that we are trying to have clarity on and make sure we agree on it,” Parsram said. “And there’s a big talk in the media that there isn’t full coverage insurance. We are working to ensure that whatever is in the document, that there is full indemnification for the environmental obligations in that agreement.”

Parsram told OilNOW previously that the regulator is aiming to finalise this by the end of March.

The central focus of the agreement in local media has been the financing amount which would be available through affiliate guarantees in case an oil spill or other disaster occurs at ExxonMobil’s operations. That amount, as per the current discussions with the EPA, stands at US$2 billion.

ExxonMobil had held a briefing with reporters earlier this month to assure them that it has the technical and financial resources to address a spill, though it is very unlikely to occur. The company said it adheres to an internationally accepted, tiered response system used to determine the requirements of response personnel and equipment. He said this system remains aligned with the principles of the International Convention on Oil Pollution Preparedness, Response and Cooperation (OPRC), the Caribbean Island Oil Pollution Preparedness Response and Cooperation (OPRC), and the National Oil Spill Response Plan of Guyana to provide an efficient framework to build preparedness and response capabilities matching the oil spill risks from all types of operations.

“The value of insurance will not limit the company’s ability to respond to an event, and response activities would certainly not be delayed by discussions with insurers. We have the financial capacity to meet our responsibilities for an adverse event and we are committed to paying all legitimate costs in the unlikely event of an oil spill,” President of ExxonMobil Guyana, Alistair Routledge said.

The issue has been one of great contention, with former EPA Director, Dr. Vincent Adams, and other political commentators being fiercely critical of ExxonMobil and the EPA.

In an address to a Health, Safety, Security and Environment (HSSE) Conference held by the American Chamber of Commerce Guyana (AmCham) on Thursday, Parsram called for an end to antagonism in environmental discourse.

“The traditional antagonistic way of addressing environmental sustainability is no longer tenable. It’s a past era approach, nothing changed, we need other approaches,” the chief environmental regulator said.

Cooperation, partnerships, open conversation and trust, Parsram argued, will go a far way in solving problems.

He also said companies must act in good faith and communicate with the EPA on issues and challenges, so they can work together to find solutions, ensure compliance, and prevent and manage harm.


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