‘ExxonMobil and Gov’t selling Guyanese pipe dream by claiming ‘assets’ can be sold to handle oil spill costs’ – PNCR
Kaieteur News – President of ExxonMobil Guyana Limited (EMGL), Alistair Routledge is on record assuring Guyanese that the company has assets which can be sold to take care of oil-spill related costs, while Vice President Bharrat Jagdeo said the country is well shielded and should not worry about those expenses.
Advisor to the Opposition Leader on Economics and spokesperson on oil and gas, Elson Low
This is however nothing short of a “pipe dream”, according to the largest opposition party in Guyana, the People’s National Congress Reform (PNC/R).
Advisor to the Opposition Leader on Economics and spokesperson on oil and gas matters, Elson Low in a recent interview told this newspaper, “The idea that the Stabroek block partners’ local assets are satisfactory to cover any damage from an oil spill is farcical. Vice President Jagdeo first tried to sell this idea to the Guyanese people and it is disappointing to see it referenced again.”
He pointed out that in the event of a major oil spill offshore in the Stabroek Block, production will be severely impacted and equipment may be irreparably damaged. This means that the value of existing assets and oil wells will plunge, at least in the short term, according to him.
“It may even be some time before a well can re-enter production, if it is not abandoned altogether. To claim that the country can rely on these assets is thus an attempt to dodge the provision of appropriate oil spill insurance as well as a parent company guarantee,” Low argued.
The treasurer of the PNC/R was keen to note that oil spill expenses can run into the tens of billions of US-dollars, as he pointed to the urgency of exercising caution when it comes to provisions to safeguard Guyana.
At previous press engagements, Alistair Routledge boasted of his company’s assets as a primary form of financial assurance. He said citizens should note that this is separate from the assets of the other Stabroek Block co-venturers who also have substantial assets and share any liability for response activities.
The country’s financial line of defence or response to a spill includes a US$600 million insurance package, offered by a company owned by ExxonMobil, a US$2B oil spill guarantee, and assets which the company said can be sold to take care of its liabilities.
A look at the company’s 2023 Annual Report however raises further concerns about Guyana’s preparedness to respond to any such event, as more than half of Exxon’s assets are production wells, located several thousands of feet below the water surface.
According to the company’s 2023 Annual Report, at the end of December 2023, Exxon’s assets, including vehicles, buildings, wells and facilities in progress, production wells and facilities as well as other right of use equipment such as the FPSOs, drill rigs and others, totaled almost $3 trillion (GYD) or US$14B.
Notably, the wells and facilities in progress and the production wells and facilities account for just over US$10B. This has therefore raised the question of whether Exxon will cash out the wells and facilities to pay for an oil spill.
It was reported that VP Jagdeo during his February 22, 2024 press conference at Freedom House in Georgetown stated that Exxon has some $20B in assets that can be sold in the event of an oil spill.
He was asked by Kaieteur News to list the assets, but instead shifted his attention to the assets of Hess- a 30 percent shareholder in Guyana’s Stabroek Block.
