Exxon must compensate any nation affected by Payara oil spill

Whether it is Guyana or one of its regional neighbours, ExxonMobil will have to ensure proper compensation for the damage or loss caused by any unmitigated oil spill from the Payara project which gets underway by 2024. This is one of the key provisions that the People’s Progressive Party/Civic (PPP/C) administration was able to secure during recently concludednegotiations for Payara’s environmental permit.

This clause was specifically outlined under section 13.0 of the permit issued by the Environmental Protection Agency (EPA). The section which deals with Liability for Pollution Damage says at 13.7: “The Permit Holder shall compensate any party who suffers any loss or damage as a result of the attributed project, in accordance with Section 19 (3) (e) of the Environmental Protection Act Cap. 20: 50, Laws of Guyana.”

The permit also goes on to state that ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), its servants and/or agents, shall be held liable jointly and/or severally for environmental damage due to pollution from its activities within Guyana, its territorial waters, contiguous zones, continental margins, continental shelf, and Exclusive Economic Zone, inclusive of damage to the marine environment, biodiversity, protected species and natural habitat.

With respect to the relevant insurance coverage for any possible damage or loss, the permit notes that it has to be in such amount as is customary with international petroleum industry norms. The EPA also made it clear that it reserves the right to request documentary evidence that the insurer is authorized to provide such insurance in the jurisdiction as well as to see evidence of the insurer’s financial strength.

The EPA will also demand to see legally binding documents that EEPGL’s parent company, being ExxonMobil, and its partners in the Stabroek block, being Hess Corporation and CNOOC/ NEXEN, will undertake to provide adequate financial resources to ensure all environmental obligations by their subsidiaries will be met.

(Kaieteur News)