GUYANA: No agreement with former EPA administration was made for US$2.5B insurance coverage – Routledge

On Monday, ExxonMobil Guyana President, Alistair Routledge set the record straight on this matter as he emphatically noted that no such agreement was ever made.       

Routledge did reveal however that Esso Exploration and Production Guyana Limited (EEPGL) is working with the Environmental Protection Agency and its co-venturers being Hess Corporation and CNOOC, to put in place a combined US$2B package of affiliate company guarantees. Routledge highlighted that this value exceeds equivalent guarantees required by regulators in Canada, the United States, and the United Kingdom.

Further to dispelling the foregoing piece of misinformation, Routledge also dispelled inaccuracies being peddled in some sections of the society on the issue of “full coverage insurance” from ExxonMobil Corporation.

Routledge categorically stated that EEPGL which signed the Stabroek Block Production Sharing Agreement (PSA) as is the designated Operator for the oil-rich concession, has insurance coverage that meets international industry standards for all o, ExxonMobil Guyana President, Alistair Routledgef its petroleum activities here.

The ExxonMobil Guyana President said, “It is important to note from the onset that our first priority for every project is to put in place mitigations and processes that help to prevent adverse events by utilizing the best technologies, equipment, and people in our operations. ExxonMobil maintains the industry’s only sustained, dedicated and in-house oil-spill response research programme, which dates back to the 1970s.”

The Exxon official added that in Guyana, his company adheres to an internationally accepted, tiered response system used to determine the requirements of response personnel and equipment. He said this system remains aligned with the principles of the International Convention on Oil Pollution Preparedness, Response and Cooperation (OPRC), the Caribbean Island Oil Pollution Preparedness Response and Cooperation (OPRC), and the National Oil Spill Response Plan of Guyana to provide an efficient framework to build preparedness and response capabilities matching the oil spill risks from all types of operations.

Given the company’s aforementioned track record, Routledge said commentary which suggests that ExxonMobil Guyana will not be able to effectively manage response activities based on its current insurance scheme for its Guyana operations can be best described as ill-informed.

He said citizens should know too that insurance is just one source of financial assurance that could be leveraged for response activities.

Routledge said, “The value of insurance will not limit the company’s ability to respond to an event, and response activities would certainly not be delayed by discussions with insurers. We have the financial capacity to meet our responsibilities for an adverse event and we are committed to paying all legitimate costs in the unlikely event of an oil spill.”

Routledge also pointed out that Esso Exploration and Production Guyana Limited, the Operator of the Stabroek block, was established in 1998, and had, as of year-end 2020, almost $US5B in assets, which is a primary form of financial assurance. He said this is separate from the assets of the other Stabroek block co-venturers who also have substantial assets and share any liability for response activities.

Referencing statements made by ExxonMobil Chairman and CEO Darren Woods at the recent International Energy Conference, Routledge categorically stated that the American multinational is committed to Guyana for the long term. He said, “ExxonMobil Guyana has invested billions of dollars in multiple oil and gas projects here. We are dedicated to avoiding any spill, but should one occur we are prepared to mitigate and resolve it as quickly and comprehensively as possible.”

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  • guyaneseonline  On 03/02/2022 at 12:33 am

    Exxon in attempt to bamboozle us with fanciful talk to camouflage the truth

    Mar 02, 2022 Editorial in Kaieteur News

    Dear Editor – Letter from: Dr. Vincent Adams – Former EPA Head – Guyana

    It’s insulting that Exxon once again seems to believe that Guyanese people are stupid, attempting to bamboozle us with fanciful talk to camouflage the truth; but judging by their modus operandi and reputation around the world, I leave it to the Guyanese people to decide who is believable.

    First, with respect to the $2.5 Billion insurance being denied, there is documentation otherwise, at the EPA. The fact is that Mr. Rod Henson, Exxon’s former Country Manager, hand delivered to me and the EPA Attorney, the insurance documentation, the details of which were explained by Mr. Henson, and which I personally added up to value approximately $2.5 Billion. That document sits in the EPA files, so I call upon the EPA to release it. As stated in my letter to the Editor, since that time around April 2019 to August 2020, regular meetings were held among the lawyers of the EPA and EEPGL to agree upon how liabilities above the $2.5 Billion, would be shared among the parent companies of ExxonMobil, Hess and CNOOC. Draft documents detailing their proposal were brought to each of these meetings, and I was briefed after each meeting. I therefore challenge Exxon to deny these meetings, recognizing that these draft documents, emails and calendars of participants can be retrieved. Further, I have the utmost regard for Mr. Henson’s honesty, and do not believe that he would take part in any of this brazen denial.

    Second, during that same period, April 2019 to August 2020, EPA employees and I, incessantly broadcasted through all of the media outlets, this unprecedented accomplishment of obtaining what we called “unlimited liability coverage”. So much so, that many questions were raised in the media as to how is it possible that the EPA could depart from the Government/EEPGL Contract, when the Government continues to claim that the Contract is sacrosanct. Thus, with all of that media coverage including the EPA and Exxon ongoing meetings to finalize the arrangement, Exxon must answer the commonsense question as to why they did not ever deny any of it before now?

    Third, the highly publicized $2.5 Billion insurance caught the attention of the Guyana Insurance Association, which contended that the insurance carried by a foreign company, has to be transferred to Guyana in accordance with Guyana’s laws. This triggered a meeting among the Bank of Guyana, the Guyana Insurance Association, the Department of Energy, and the EPA, held at the Office of the Governor of the Bank of Guyana, to discuss how to proceed with the transfer of the insurance to Guyana. Numerous email exchanges amongst the parties exist to prove that the meeting was held, along with the reason for the meeting and its agenda.

    Fourth, Exxon as typical, responded that “it has insurance coverage for all of its petroleum activities”, but cleverly avoided the amount of that insurance coverage. So, Exxon must state that if it is not the $2.5 Billion, what is it? and must produce the documentation.

    Fifth, Exxon responded that “We have the financial capacity to meet our responsibilities and we are committed to paying all legitimate costs in the unlikely event of an oil spill…quickly and comprehensively as possible” – sounds very familiar to what Mr. Henson said, when we responded that with that avowal, they shouldn’t have any problems putting it in writing. That brought about the agreed upon plan for full liability coverage. Besides, we don’t have to go too far to see what is happening right in our backyard in Peru without a tight contract.

    Lastly, Exxon claims that “EEPGL had, as of year-end 2020, almost $US5.0Bn in assets”, cunningly evading admitting what were EEPGL’s assets in 2019, the only time of relevance when the Permits were signed. The real truth is that Exxon calculatingly dodged that EEPGL’s assets were almost nothing in 2019 before production – the reason why we did not allow them to be self-insured with little or no assets.

    In closing, I would urge the media to vigorously challenge Exxon to answer the questions and queries herein with specificity, and without the fluff and fanciful talk to distract. Again, I leave it to the Guyanese people to decide who to believe.

    Dr. Vincent Adams – Former EPA Head – Guyana

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