Financial coverage for any mishap is being considered before Guyana approves ExxonMobil’s fourth development project, Yellowtail, but Vice President Dr. Bharrat Jagdeo highlighted that Guyana and the company are in talks for a guarantee that will cover the entire Stabroek Block.
As per Guyana’s Environmental Protection Act, the Environmental Protection Agency (EPA) may require this “financial assurance” from a company seeking environmental authorisation for a project such as a new development in oil fields offshore.
This type of insurance is needed “for measures appropriate to prevent the adverse effects (such as oil spills) upon and following the cessation or closing of the works.”
Jagdeo defended the government’s emphasis on securing these financial assurances, noting that insurance provisions in the Payara permit and the forthcoming Yellowtail permit are stronger than those issued by the previous government.
He, however, said the government is seeking greater assurances from ExxonMobil. A consortium, led by ExxonMobil, is operating in the Stabroek Block, offshore Guyana.
“…we are working with the company to secure a parent guarantee that will cover the entire Stabroek block. Not Liza 1, Liza 2, Payara or Yellowtail, but the entire block,” the Vice President declared during a live discussion aired on his Facebook page late Thursday night.
This overall guarantee the government is seeking, Jagdeo explained, is not part of the permitting process for the forthcoming Yellowtail project.
The start-up of the Yellowtail project is expected to begin in late 2025 and is anticipated to produce 220,000 barrels of oil per day from a Floating, Production, Storage and Offloading (FPSO) vessel that would be able to store up to two million barrels.
This project would be the fourth development in the Stabroek Block.
Insurance for exploration and production has been a strong concern of many interested in Guyana’s development and the potentially devastating impact of adverse events offshore.
President of ExxonMobil Guyana Alistair Routledge, last month, explained that in addition to its insurance, which meets international standards, it also has the financial capacity to respond to an adverse event.
He said the commentary on “full coverage” insurance and guarantees inaccurately suggest that ExxonMobil Guyana will not be able to effectively manage response activities while pointing out that insurance is just one source of financial assurance that could be leveraged for response activities.
