AS an avid follower of the news and information on oil and gas, I write to respond to the claims published in the media regarding insurance coverage for the oil-and-gas sector. The latest claim is that Exxon signed on to an agreement guaranteeing “unlimited liability coverage” consisting of insurance plus parent-company guarantee for coverage of all liabilities above the insurance limit. To date, these claims have not been substantiated by any document in the public domain, but continue to be irresponsibly echoed by the media.
This misleading narrative, chiefly from the former EPA head whom it seems has an axe to grind, proffers that in the absence of “full-coverage” insurance, Guyana is somehow imperilled and at grave risk in the event of an operational incident. This could not be any further from the truth. In the Deepwater Horizon spill, British Petroleum paid out nearly US$65 billion—almost none of it covered by outside insurers.
ExxonMobil Guyana and partners maintain the ability to respond to an incident with overwhelming resources, in money, equipment, and manpower and have made it clear that they will pay for all costs related to a spill. This is a promise we should hold them to.
With billions of dollars in local assets and ongoing negotiation for US$2 billion in additional guarantees for the Yellowtail project, there is ample financial resources at the ready in the event of an incident. This is arguably the best form of “insurance” one can have.
Guyana is one of the most promising developments for Exxon, Hess and CNOOC and all have billions invested in the continued success and safe operations. It would be foolhardy to assume that these companies don’t fully understand and have taken steps to protect their investments, but more importantly the livelihoods and safety of the people of Guyana whose continued good graces are needed to ensure ongoing operations.
Significant preparedness efforts including the training of responders under the National Oil Spill Response Plan of Guyana and partnership with the Caribbean Island Oil Pollution Preparedness Response and Cooperation (OPRC) ensure that Guyana has both the resources and manpower to handle even the most extreme incidents.