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Guyana environment at risk, ExxonMobil PSA only with general environmental regulations

By Kaieter News

Petroleumworld 02 28 2018

All Production Sharing Agreements (PSA) speak to the obligations of the oil operator when it comes to protecting the environment. But the responsibilities of the contractor may vary from contract to contract. This is evident when one compares the PSA ExxonMobil signed with Ghana to that which it inked with Guyana.

In the case of Guyana, ExxonMobil is merely told that in the conduct of its operations, it is expected to take “necessary and adequate precautions” in accordance with good international petroleum industry practice, against pollution and the protection of the environment and the living resources of the rivers and sea.

But merely uttering these sentiments in a PSA was not good enough for Ghana. In fact, the Government of that African nation was careful to point out exactly what it expects ExxonMobil to do as it relates to environmental safeguards.

The Ghana-ExxonMobil contract says that the Contractor shall exercise its rights and carry out its responsibilities under the Agreement in accordance with International Oil Field Practice, and shall take steps in such manner as to: result in minimum ecological damage or destruction;
control the flow and prevent the escape or the avoidable waste of Petroleum discovered in or produced from the Contract Area; prevent damage to Petroleum-bearing strata; prevent the entrance of water through boreholes and wells to Petroleum bearing strata, except for the purpose of secondary recovery; prevent damage to onshore lands and to trees, crops, buildings, or other structures; and avoid any actions which would endanger the health or safety of persons.

In the event of pollution or damage to fresh water, marine, plant, animal life, or land that is caused by Contractor as a result of Petroleum Operations; ExxonMobil, in accordance with applicable laws and International Oil Field Practice, is expected to promptly take all necessary measures, in accordance with International Oil Field Practice to control the pollution, to clean up Petroleum or other released material, or to repair, to the maximum extent feasible, damage resulting from any such circumstances.

What Ghana also makes clear to the contractor is that any oil spill or damage to the environment caused directly from the Gross Negligence/Willful Misconduct of Contractor shall be borne by ExxonMobil and cannot be considered as recoverable costs or part of petroleum costs. Guyana's contract does not make provisions for this.

Furthermore, Ghana's contract states that prior to commencing drilling of the first Exploration Well, the Contractor shall conduct a baseline environmental study of the degree of pollution in the relevant portion of the Contract Area to determine the environmental conditions existing therein.

The contract says, too, that the terms, timing, and procedure of such baseline environmental study shall be set forth in an approved Work Programme and budget. Guyana's contract with ExxonMobil makes no mention or provision for this.


Story from Kaieter News
02 28 2018

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