GUYANA: OIL: Proper insurance coverage for oil spills – By GHK Lall

GHK Lall

Encouraging Events, Disturbing Developments… By GHK Lall

Feb 27, 2022 – Kaieteur News – It has to be disturbing to all Guyanese that both Exxon and Guyanese leaders continue to play footsie with prioritising full coverage insurance in the event of a disastrous oil spill. This was what one of the newer civic groups, well named as “A Fair Deal for Guyana; a Fair Deal for the Planet” made the centerpiece of their fight to get more protection and a better deal for Guyana.

I agree with the group and support its members in what I see as a necessary struggle to give the peace of mind of much-needed protections. I salute them for their courage and public outspokenness before a stubborn and vindictive PPP/C Government. They understand the risks, I know them firsthand.       

It was troubling to me that the Hon. Vice President Bharrat Jagdeo, who could talk the ears off of a bat, if he could catch one, did not lift a finger when the splendid opportunity of the International Oil Conference was in full sway at the Marriott, and he was one of Guyana’s key presenters. The Vice President was more focused on the risks of the investments of those who come here to explore for oil, than he was for the potential risks that could become devastating and a haunting reality in the instance of a catastrophic oil spill from Exxon’s offshore operations.

I describe as devastating because the damage could be untold and reach far from our shores severely impacting neighbours. All the oil money calculations – now, later, and using favourable pricing scenarios – regarding income to us would not be enough to help us handle our own damage plus that of neighbours. We are not talking merely of local coastline damage, which would be bad enough, but of the massive disruptions to an entire way of life in the tourist-oriented countries close to us. These could be existential, and the fears are healthy and real, not products of fevered imagination.

It is regrettable, and inexplicable, that the Vice President, a leader known for his in-the-face aggressiveness in the domestic arena, could withdraw so humbly and whimperingly before Exxon and company at the conference. As I see it, when the Vice President had a golden opening to strike by taking the fight to Exxon before an international audience, he let the moment dribble through his hands like sand. This could come back to haunt, because should a real cataclysmic oil spill occur, it would not be over and done with in one generation. That is, the accumulated liabilities highly likely to be awarded against Guyana would extend over many lifetimes in several generations. The result is that all the rich promises of oil would have vanished in smoke, with huge generational debt overhangs left as its costly legacy.

The US$2B that the Vice President is waiting on hopefully, like some pathetic on-the-knees supplicant, through some mystery “acknowledgement” from Exxon America might sound like a heap of money to many Guyanese. It would not amount to much in the context of an oil spill of immense proportions that spreads beyond our borders. Further, to depend on the compassion of Exxon in times of oil spill destructions is to ignore the lessons of the company’s past when it was faced with oil crises. Exxon leaders have not hesitated to use the fullest range of legal maneuvers and tactics to get the best of its opponents. On most occasions, the company has outlasted pursuers, and outwitted them every step of the way.

The final result has been that what started as impressive financial awards from lower courts against the company have been whittled down and weakened by leading jurists at higher levels in the judicial system to such a point that they become the emptiness of pyrrhic victories for the winners.

Guyana can barely hold its head above water when facing the big boys, which was confirmed first by the coalition with this horrendous oil deal, then by the PPP/C Government last week during the oil conference. Local leaders were reduced to lip-syncing Exxon’s songs and glad-handing and chaperoning for the cameras. If that was all they were good for on their home turf, they would surely be out of depth elsewhere.
(The views expressed in this article are those of the author and do not necessarily reflect the opinions of Kaieteur News.)

Post a comment or leave a trackback: Trackback URL.

Comments

  • guyaneseonline  On 03/02/2022 at 12:32 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.

    Sincerely,
    Dr. Vincent Adams – Former EPA Head – Guyana

  • theonly  On 03/08/2022 at 7:26 pm

    Keep up the good work MR S O S

  • wally n  On 03/08/2022 at 8:12 pm

    As close to specific as any did before (except Glenn)
    I wish he had closed with…… GUYANA WAKE UP YOU MIGHT BE SCAMMED!!!!

  • Dennis Albert  On 03/11/2022 at 4:02 am

    With massive oil reserves, why are we as Guyanese content with living like the peasants in very poor countries? We should at least have a standard of living like Barbados or Trinidad during the economic boom times.
    But the rich import Italian Lamborghinis and Ferraris while the soup drinkers cheer on them at the Dakota racetrack and on YouTube. Sheeple.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: