Amid calls for an absolute guarantee that it will fully respond to an oil spill offshore Guyana, President of ExxonMobil Guyana Alistair Routledge says that the company intends to go above its commitments on paper to respond to that potentially disastrous event.
In recent months, there have been calls for Guyana’s government to secure full liability coverage from the parent companies of the co-venturers in the Stabroek Block.
Prolific exploration in the 6.6 million-acres Stabroek Block by ExxonMobil affiliate Esso Exploration and Production Guyana Limited (EEPGL), has so far led to multiple discoveries that could result in the production of 11 billion barrels of oil.
Routledge, in an interview with the News Room on Friday, reiterated previously committed assurances from the company. He said that there exists insurance for all drilling activities at wells offshore Guyana.
“… and that is to the highest international standard for every single well that we are drilling,” he underscored.
But that’s not all.
Asked if there is a limit to the responsibility that will be undertaken, Routledge underscored that the company is duly committed to Guyana, beyond legal commitments.
“There is no limit to what we would do to respond.
“There are other commitments that we make as part of putting paperwork in place that gives people comfort,” the company head said.
He alluded to ongoing engagements on a proposed US$2 billion parent company/ affiliate guarantee with the Environmental Protection Agency (EPA) and the company’s co-venturers Hess and CNOOC, should EEPGL and its co-venturers default.
Even so, Routledge said that the company is not leaving Guyana anytime soon.
Importantly, too, he explained that the oil companies are liable for the costs associated with clean-up, restoration and compensation as outlined in various environmental permits granted ahead of the sanctioned oil production offshore.
The Liza-1 permit issued in 2017 is the only environmental permit that does not have a specific requirement for insurance coverage. Insurance requirements were introduced for the Liza-2 development while the Payara, Yellowtail and the recently renewed Liza-1 permits clearly define the requirement for insurance coverage and parent or affiliate guarantee.
A recent release from the Environmental Protection Agency (EPA) noted that it is in receipt of insurance policies for Liza-1, Liza-2, Payara and is currently awaiting Yellowtail’s policy. As per those policies, there is coverage of a total of US$600 million per occurrence of a spill event.
Aside from the financial considerations, the company head was keen on pointing out that the likelihood of an oil spill is “extremely low” given the company’s focus on operational efficiency.
In the near future, too, the company will land the region’s first capping stack – a modern piece of equipment that can seal a well in the event of an accident.
“It’s going to be part of our commitment to ensure that we have all controls in place not just to prevent but in the very unlikely event that something happens, we can respond very quickly,” he said.
