The Guyana Government recently gazetted the financial assurance and insurance packages secured from an ExxonMobil-led consortium for the Stabroek Block where 11 billion barrels of oil equivalent resources have been unlocked. The contract of insurance seen by this news agency covers the period February 1, 2024 to February 1, 2025 with a US$100M coverage for liabilities associated with an oil spill incident. The contract also contains a US$500M for “Operator’s extra expense,” bringing the total insurance coverage to US$600M. An affiliate company guarantee to the tune of US$2B was also gazetted.
Civil society stakeholders, specifically Godfrey Whyte and Frederick Collins, initiated legal proceedings against the Environmental Protection Agency (EPA) in 2023, demanding that Exxon, alongside partners Hess and CNOOC, provide Guyanese authorities with an unlimited parent company guarantee for oil spills. Both Whyte and Collins argued in court that the coverage of all oil spill costs is a requirement of the permits granted for the Liza Phase One and Liza Phase Two projects, currently producing 150,000 barrels of oil per day (bpod) and 225,000 bpod respectively.
In a landmark ruling back in May of last year, High Court judge Sandil Kissoon declared the EPA to be in breach of its statutory duty, stating that it failed to enforce compliance by Exxon and partners of its financial assurance obligations. Justice Kisson ordered that unlimited parent company guarantee be provided but this was stalled following an appeal by the EPA before the Appellate Court. The Guyana Government had applied to the said court to be joined to the case but lost that bid.
The Guyana Government, through Attorney General Anil Nandlall, subsequently took his appeal to the Caribbean Court of Justice and won. The battle for unlimited parent company guarantee continues to engage the attention of the Appellate Court.
