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ExxonMobil says it will provide $2 billion in guarantees to compensate Guyana, Trinidad and Venezuela in case of oil spill
Kaieteur News – Maria Skocik, project environment and regulatory manager for ExxonMobil Guyana, assured that if an oil spill occurred, Guyana, Trinidad and Venezuela could be fully compensated from the $2 billion oil spill guarantee.
Scocik was asked to speak about the economic impact of a potential oil spill on Guyana and the Caribbean region, and whether existing insurance would fully cover Guyana, and how other affected countries would be compensated.
“First and foremost, we are committed to safe operations, both for our people and the environment, and as Becky mentioned, we are doing everything possible to ensure that no incidents occur. If incidents do occur, we have the technical and financial capabilities to respond to them,” Exxon officials said.
She explained that measures such as insurance have been taken and mechanisms will be activated to facilitate the clean-up.
“So we take measures like insurance, establish clean-up and appeal mechanisms, and let companies file claims. But we do everything possible to prevent accidents when designing projects and operating them,” she said.
To clarify this, this publication asked: “So you are saying that if there is an accident, Guyana will receive full compensation and the affected countries like Trinidad and Venezuela will also receive full compensation?”
“Yes, absolutely,” Skoczyk responded. “So if an incident does occur, we will be doing full mitigation and relief for the area, so we will be working to clean everything up and provide financial support to all parties that are impacted.”
The oil company has often boasted about its ability to handle an oil spill if one occurred in the 26,800 square kilometer Stabroek block. Whenever asked about the cost of an oil spill, the company has assured that it will not abandon the country but will handle the associated cleanup and compensation.
However, these assurances were thrown aside and the $2 billion Oil Spill Guarantee and Indemnity Agreement superseded all oral and prior written statements.
In fact, the agreement, signed by Environmental Protection Agency (EPA) Executive Director Kemraj Parsram, specifies that the maximum amount to be jointly provided by the Stabroek block partners is $2 billion.
According to the document, “This Guarantee and Indemnity Agreement constitutes the entire agreement and understanding of the parties with respect to the subject matter hereof and supersedes all oral representations and prior written documents relating hereto; provided, however, that for the sake of clarity, the Beneficiary and the Guarantors acknowledge that this Guarantee and Indemnity Agreement is not intended to and does not modify any term or provision of the Petroleum Agreement.”
Before Guyana’s government can use any of the $2 billion in oil spill guarantees provided by ExxonMobil, Hess and CNOOC, it must first send written letters to the three guarantors informing them that the company has failed to meet its legally mandated financial obligations.
The Guarantee and Indemnity Agreement filed by the Stabroek Block Partners on June 9, 2023, clearly states: “In order for the Beneficiary (GoG) to exercise its rights under this Guarantee and Indemnity Agreement, the Beneficiary must provide the Guarantor at the Guarantor’s address set out in Section 4.4 with a written notice signed by the Beneficiary’s authorized representative (the “Notice”) stating that EEPGL has breached the Environmental Obligations…”
The notice to the guarantor must describe in detail the environmental obligations that are alleged to have been breached, including the legal basis that gave rise to the relevant environmental obligations; the reasons why ExxonMobil failed to perform the applicable environmental obligations and the unpaid amounts for which the Company is liable.
In addition, under the agreement, the government must notify the guarantor that the oil company has been informed of its intention to draw down the guarantee.
The company also faces public questions about the safety of its operations and the economic impact of such incidents during a series of scoping meetings for new oil projects.
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