Concerned Guyanese write Exxon shareholders for disclosures on risk, flaring for Liza project

Over 30 Guyanese wrote last month to some ExxonMobil’s shareholders to press for the oil major to disclose an updated risk assessment, flaring data and emergency response plans pertaining to the Liza Phase 1 project offshore Guyana.

The move was prompted by a recent statement by the Coalition United for a Responsible Exxon (CURE) group of shareholders indicating that that the company’s problematic large scale portfolio investments are incompatible with the Paris Agreement.

“We note CURE’s statement that Exxon’s current direction is premised on outdated assumptions about high oil prices, demand, and margins that are incompatible with the reality of climate change and the inevitable transition to renewable energy sources... We believe you should look carefully at Exxon’s large scale portfolio investments in Guyana,” the May 24 letter, released by citizens group A Fair Deal for Guyana, says.

It goes on to state that there is outrage at the exploitative terms of Exxon’s petroleum deal in Guyana and there are demands for renegotiation, extensive criticism of Exxon’s operations in addition to widespread anger at Exxon’s “unauthorized” flaring of billions of cubic feet of gas and ongoing litigation. “Exxon’s ultra-deep petroleum operations offshore Guyana pose a serious, growing and poorly-assessed threat to the environment and people of Guyana and the Caribbean. All of this has the potential to affect shareholder value,” the letter adds.

CURE represents a global spectrum of stakeholders focused on sustainability and committed to delivering long-term returns that account for the realities of a changing climate and energy sector. As of May 3, 2021, CURE brings together over 135 institutional members, who collectively

represent $2.5 trillion in assets

According to a press statement issued by A Fair Deal for Guyana, which advocates the protection of the environment, approximately 34 Guyanese have written to CURE requesting that an update risk assessment be disclosed while warning that a well blowout could be economically and environmentally catastrophic – with a comparable impact on shareholder investments in Exxon.

The letter charges that there have been signs that Exxon’s operations are below standard given some systemic failures. It pointed to issues with the Liza Destiny FPSO’s gas compressor, which has seen Exxon continue to flare billions of cubic feet of associated gas.

“In light of the threats to Guyana, the Caribbean, the global climate, and the corresponding risk to the value of your investments in Exxon, we urge you to ask Exxon to disclose promptly and publicly: the financial guarantees and assurances that Exxon has in place to cover the enormous response, recovery and remediation costs from an unplanned event such as a well blowout; an updated risk assessment in light of Exxon’s use of faulty equipment and failure to follow proper procedures; a risk mitigation strategy for a well blowout updated in light of… systemic failures; an updated oil spill response plan in light of Guyana’s continuing limited ability to take action to mitigate the impact of a well blowout; and the total amount of gas that Exxon has flared since first oil,” the letter states.

The letter also includes a map from the Payara Environmental Impact Assessment showing that an unmitigated release of 202,192 barrels of oil per day over 30 days could reach as far as Jamaica. The letter also reminded the Exxon shareholders that the BP Macondo well blowout cost BP over US$65 billion.

The signatories include Ramon Gaskin, former Auditor-General of Guyana Anand Goolsarran, President of Transparency Institute Guyana Inc. Fred Collins, Gerald Perreira, and Attorney-at-Law Melinda Janki, among several other activists and stakeholders from academia, science, engineering, religion, and business. The statement added that the letter was endorsed by over 60 international organisations and individuals from Brazil, Canada, Costa Rica, Mexico, Puerto Rico, the United States of America, Ghana, Kenya, Namibia, Nigeria, Zambia, the Philippines, India, France, Germany, Ireland, the Netherlands, Spain, Sweden, Switzerland, Ukraine, and United Kingdom.

The Guyana letter was sent to Andrew Behar of As You Sow, an Exxon shareholder, who sent it to the CURE Exxon group on the day of the Exxon AGM.

According to the statement, Janki noted that CURE has said that Exxon’s strategy is outdated and that the board under-estimates the scale of the energy transition, while noting that the financial institutions, the people who lend the money, are pulling out of fossil fuels. “And yet, Guyana’s tiny business sector is looking backwards and trying to buck global market trends. That way lies bankruptcy and big bills for Guyanese taxpayers. The business sector should be looking to the future and leading Guyana’s transformation to cheap and virtually unlimited renewable energy for everybody,” she added.

Meanwhile Perreira commented that there are some who see every question about oil as anti-development. “Development is a colonial concept that leaves people perpetually running to catch up with the so-called developed economies that have brought the earth to the brink of climate disaster. We have every right to know what is being done in our country and what is being done to us,” he said.