Exxon lodges US$2B insurance guarantee pending outcome of appeal
ExxonMobil’s local subsidiary Esso Exploration and Production Guyana Limited (EEPGL) has lodged a US$2 billion insurance guarantee with the country’s Environmental Protection Agency (EPA).
Phillip Rietema, the company’s Vice President and Business Services Manager, told reporters on Tuesday that an affiliate guarantee was signed last Friday with the EPA.
The provision of this guarantee follows a stay of order granted by Guyana’s Appeal Court last week. Essentially, Appeal Court Judge Rishi Persaud paused the High Court’s earlier order that ExxonMobil and its partners must provide an unlimited guarantee to cover potential oil spills.
The Appeal Court Judge allowed the stay but also instructed EEPGL to lodge, within 10 days, a US$2 billion guarantee. If the company did not lodge this sum, the stay would have been dismissed.
Rietema pointed out that the guarantee was lodged on Friday, just one day after the Court granted the stay of order.
In December 2019, EEPGL and its co-venturers – Hess and CNOOC – started oil production in Guyana but a case brought by Guyanese argues that the consortium was in breach of its insurance obligations.
Rietema explained that the company is well-positioned to cover the costs associated with any adverse event offshore, such as an oil spill. And he emphasised that the company has too much at stake in Guyana to walk away from its responsibilities.
“We’ve been here since 1999 and we’ve been spending and investing since then,” Rietema told reporters at an engagement held at the company’s Kingston, Georgetown, office.
ExxonMobil Guyana had previously said that more $20 billion in financial resources are currently available to respond to a possible spill and it includes up to US$19 billion in financial assets among the co-venturers – Esso Exploration, Hess and CNOOC.
Another US$600 million in insurance, as required by the Environmental Permit issued before the startup of production exists, the company pointed out too.