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2020 oil production deadline has been placed above all other considerations …Guyana now at a serious risk – Chris Ram


By Kaieter News

Petroleumworld 02 27 2018

While it has not been set in stone, the Government of Guyana and even U.S. oil giant ExxonMobil have frequently told the nation that oil production is set for 2020. And in the midst of concerns by the public regarding inadequate environmental safeguards in this sector, the government appears to be focused only on its production deadline.

This viewpoint was recently proffered by Chartered Accountant and anticorruption advocate, Chris Ram. In an interview with this newspaper, Ram noted that the Government, in acting in such a matter, is putting the nation at “serious risk”.

In spite of government's confidence and rhetoric that all precautions are being taken, Ram said that it is for entities like the Environmental Protection Agency (EPA) to come forward and pronounce on these matters.

He noted, however, that the EPA is yet to utter a single word on oil spill preparedness in Guyana.

“This whole thing seems to be between the Minister and the oil company, and that is dangerous. I would also note that the topic of oil spill response is an important one and it requires national discourse.”


From all indications, it appears that the coalition administration is confident that the necessary safeguards are in place to deal with any possible environmental implication that would result from petroleum operations offshore Guyana.

In fact, Minister of Natural Resources, Raphael Trotman noted a few weeks ago that like many members of civil society, the topic of oil spill response and preparedness is something he is concerned about.

The Minister stated, “I know there have been different interpretations, but ExxonMobil has demonstrated that it is doing all that it can do and it has acquired the very best of technology that the world has to offer to date, for design and construction of FPSO and various subsea architecture to deploy…We are also working with the Civil Defence Commission while preparing a national response plan.”

Trotman added, “I have seen a draft of it and it is in various stages of development. We are also seeking training from the US Coast Guard and speaking with other Governments for support…We are not at all taking this for granted. It is something that we are very concerned about…”


While Trotman is optimistic about local efforts in place to address a possible oil spill, many commentators have expressed dissatisfaction with the actual oil spill provisions of Guyana's Production Sharing Agreement with ExxonMobil.

In the Agreement, there is no provision regarding any adverse impact on fishing grounds and coastal communities or on neighbouring countries.

This alarming observation was recently pointed out by Chris Ram and political commentator, Ramon Gaskin.

Ram in his recent writings noted that Article 20.2 of Guyana's 2016 Oil Agreement deals with insurance, in respect of, but not limited to assets, pollution, third parties and employees. The Attorney-at-law pointed out that the Agreement does not require any loss of production insurance, as will apply in the case of any major disruption of production or environmental accidents.

He said that while this provision is absent from the 2016 Agreement, the 1999 Agreement which was signed by the Jagan administration, allowed for insurance to be taken out by Esso Exploration and Production Guyana Limited's affiliate insurance company. Esso is a subsidiary of ExxonMobil.

Ram stated, “That requirement has been changed and now allows the Contractor to have the right to self-insure against the risks identified. This is a major concession by (Natural Resources Minister, Raphael) Trotman on an issue that only specialist lawyers know about.

“What it means in practice is that anyone seeking to make an insurance claim will have to lodge that claim against Esso, CNOOC/Nexen or Hess, all of which are external companies.”

Ram said that those potential claimants must “thank” Minister Trotman for making their chances even more difficult to succeed.

Story from Kaieter News
02 26 2018

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