No agreement with former EPA administration was made for US$2.5B insurance coverage – Routledge

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During his tenure as Head of Environmental Protection Agency (EPA)–October 1, 2018, to August 2020–Dr. Vincent Adams had stated, repeatedly, that he was able to secure an agreement with ExxonMobil Guyana for insurance coverage totalling US$2.5B.

On Monday, ExxonMobil Guyana President, Alistair Routledge set the record straight on this matter as he emphatically noted that no such agreement was ever made.

Routledge did reveal however that Esso Exploration and Production Guyana Limited (EEPGL) is working with the Environmental Protection Agency and its co-venturers being Hess Corporation and CNOOC, to put in place a combined US$2B package of affiliate company guarantees. Routledge highlighted that this value exceeds equivalent guarantees required by regulators in Canada, the United States, and the United Kingdom.

Further to dispelling the foregoing piece of misinformation, Routledge also dispelled inaccuracies being peddled in some sections of the society on the issue of “full coverage insurance” from ExxonMobil Corporation.

Routledge categorically stated that EEPGL which signed the Stabroek Block Production Sharing Agreement (PSA) as is the designated Operator for the oil-rich concession, has insurance coverage that meets international industry standards for all of its petroleum activities here.

The ExxonMobil Guyana President said, “It is important to note from the onset that our first priority for every project is to put in place mitigations and processes that help to prevent adverse events by utilizing the best technologies, equipment, and people in our operations. ExxonMobil maintains the industry’s only sustained, dedicated and in-house oil-spill response research programme, which dates back to the 1970s.”

The Exxon official added that in Guyana, his company 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.

Given the company’s aforementioned track record, Routledge said commentary which suggests that ExxonMobil Guyana will not be able to effectively manage response activities based on its current insurance scheme for its Guyana operations can be best described as ill-informed.

He said citizens should know too that insurance is just one source of financial assurance that could be leveraged for response activities.

Routledge said, “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.”

Routledge also pointed out that Esso Exploration and Production Guyana Limited, the Operator of the Stabroek block, was established in 1998, and had, as of year-end 2020, almost $US5B in assets, which is a primary form of financial assurance. He said this is separate from the assets of the other Stabroek block co-venturers who also have substantial assets and share any liability for response activities.

Referencing statements made by ExxonMobil Chairman and CEO Darren Woods at the recent International Energy Conference, Routledge categorically stated that the American multinational is committed to Guyana for the long term. He said, “ExxonMobil Guyana has invested billions of dollars in multiple oil and gas projects here. We are dedicated to avoiding any spill, but should one occur we are prepared to mitigate and resolve it as quickly and comprehensively as possible.”

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