Oil Giant, ExxonMobil Guyana believes that it stands to lose more than US$350 million in revenues monthly if the High Court ruling against the Environmental Protection Agency (EPA) and Esso Exploration Guyana stands and it is forced to scale back operations.

On the 3rd May, the High Court ordered the EPA to direct oil company to provide the unlimited liability Parent Company Guarantee within 30 days or face suspension.

The EPA and Exxon have both to the Court to challenge the High Court’s decision.

An application for the ruling to be stayed pending the hearing and determination of the appeal has since been rejected. The Appellate Court is set to hear the case on May 29.

On Friday, President of ExxonMobil Guyana, Alistair Routledge said both Guyana and ExxonMobil could lose big if the High Court’s order is not changed.

“We don’t know whether we will be able to secure those, that is a question but that is something we are pursuing, in case that order is maintained. But we [have] filed an application for that order to be stayed because we believe that if we are unable to secure, as ordered, those unlimited guarantees, then obviously the permit is suspended per that order and then we would have to stop production on the Liza Phase 1 facility, which then has significant financial implications for all of the investors but also for obviously for the country in the sense of revues that would be lost, so its vey substantive,” Mr Routledge said.

The Exxon Guyana President said in April, EEPGL and EPA finalised the parent guarantee of US$2B to complement the US$600M insurance policies for Liza Phase 1 Development Project, and remains committed to that arrangement, however, the company will be guided by the rulings of the courts.

“The order of the judge issued required an unlimited guarantee. We have aligned with the EPA on the one that has the US$2B value but if we have to, what we are working on is seeing whether we can secure such a guarantee from our affiliated companies or parent companies,” ExxonMobil Guyana President explained.

He said currently, the company is uncertain whether it would be able to secure unlimited guarantee but it is currently exploring the various options with the affiliate companies, even as it awaits the decision of the Appellate Court.

“Our agreement remains with the EPA, we did a lot of work with them, with international experts to come up with that credible valuation, and so, we agree to the wording, and we agree to the value, and that’s the basis on which we are securing those insurances currently those. So, we are making sure that we have those insurances ready should the order be stayed, but should the order be held and we are obliged to provide unlimited, we are also pursuing those or trying to secure those, but as I said we don’t know whether we can. That is part of our corporate decision-making process, ExxonMobil, HESS, CNOOC, it is not a local affiliate decision,” Mr Routledge explained.

Routledge explained that ExxonMobil and its co-venturers have rigid systems in place to prevent and or mitigate an oil spill during its operations on the Stabroek Block offshore Guyana.

He said should a spill occur, the company has the requisite systems in place and financial resources to conduct a clean up exercise.

(by Svetlana Marshall)

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