Insurance coverage

Exxon claims to have insurance coverage for all oil activities in Guyana

ExxonMobil today gave full assurances that it has insurance coverage for all of its oil activities in Guyana.

In a statement, the company’s chief executive, Alistair Routledge, responded to concerns about the company’s oil spill insurance and whether it was adequate. The CEO explained that from the start of its operations, systems were put in place.

“It is important to note from the outset that our first priority for every project is to put in place mitigation measures and processes that help prevent adverse events by using the best technologies, equipment and people in our operations. ExxonMobil operates the industry’s only in-house oil spill response research program, which dates back to the 1970s. Here in Guyana, we adhere to an internationally accepted multi-level response system, used to determine response personnel and equipment requirements,” said Routledge.

He said many statements in the public domain about insurance and “full coverage” guarantees incorrectly suggest that ExxonMobil Guyana will not be able to effectively manage response activities.

It was explained that insurance is just one source of financial assurance that could be leveraged for response activities.

“The value of the insurance will not limit the company’s ability to respond to an event, and response activities would certainly not be delayed by discussions with insurers. We have the financial capacity to meet our responsibilities in the event of an adverse event and are committed to paying all legitimate costs in the unlikely event of an oil spill.

The CEO said that Esso Exploration and Production Guyana Limited, which is the operator of the Stabroek Block, was established in 1998 and at the end of 2020 had almost $5 billion in assets, which which he says is a primary form of financial insurance.

“We are working with the Environmental Protection Agency and our joint venture partners to put in place combined warranties of US$2,000,000,000 from affiliated companies, a value exceeding the equivalent warranties required by regulators in Canada, the United States and UK. Contrary to media claims, ExxonMobil Guyana never agreed to $2.5 billion worth of insurance with a previous EPA administration,” Mr. Routledge noted.

He said that the Exxon company remains committed to Guyana for the long term, recalling that the company has already invested billions of dollars in multiple oil and gas projects in Guyana and is committed to avoiding any spills.

The opposition recently tabled a motion in the National Assembly on the issue. The motion calls on the government to reverse its decision to end the process of obtaining unlimited liability coverage for Exxon’s parent company in its operations here. The motion has not yet been submitted for discussion in the Assembly.