The Environmental Protection Agency (EPA) has issued a rigid permit for the Stabroek Block’s fifth project at the Uaru field which is expected to cost US$12.7B.
Like its predecessors, the Uaru Permit strictly prohibits routine flaring and venting and specifies that flaring is only permissible during commissioning, start-up and special circumstances.
The permit also maintains payments in instances where flaring is conducted beyond permitted durations.
Among the conditions in the permit which cater for liability are that the permit holder shall bear all costs of the restoration, rehabilitation and compensation required as a result of damage incurred due to an oil spill or other emergency resulting from the execution of the Project. Guyana Standard understands that the costs herein referred to shall be independently assessed and evaluated by a third-party determined by the Agency. It was noted that nothing contained herein shall prejudice the right of public and private actors to pursue criminal and/or civil action against the permit holder.
It also notes that the permit holder is liable for all costs associated with clean up, restoration and compensation for any damages caused by any discharge of any contaminant, including the cost of all investigations into pollution incidents or discharge of contaminants, conducted at the instance of Agency.
It also states that the permit holder shall compensate any person who suffers any loss or damage as a result of any contravention of section 19(1), in accordance with section 19(3)(e) of the Environmental Protection Act Cap. 20:05, Laws of Guyana.
It also requires that the permit holder provide one or more guarantee agreement(s) in which the Parent Company or Affiliate Companies of Permit Holder and its Co-Venturers (“Affiliates”) shall undertake to promptly and within 30 days, upon notice of default, provide adequate financial resources to satisfy their respective environmental obligations regarding the Stabroek Block.
One key condition for approval was the conclusion of negotiations on the Parent /Affiliate Company Guarantee referenced above. This is expected to be executed shortly with the signature of the guarantor and beneficiary.
