– agency says it has collected almost $1B in flaring fines that Exxon cannot recover under cost oil
The Environmental Protection Agency (EPA) has revealed that the almost $1 billion in flaring fines it collected from ExxonMobil, cannot be recovered by the oil major under cost oil, a significant win for the agency as it sought to defend its environmental stewardship record against misleading reports from an international climate change watch-dog.
An article from Climate Change News recently sought to malign Guyana and its stewardship of the environment while being an oil producer. The article, which claimed that Guyana has not been adequately protecting the environment while being an oil-producing nation, drew the ire of the EPA.
The Environmental Protection Agency
According to the EPA, not only were they never contacted for a chance to respond, but the article was replete with falsehoods. One such falsehood contained in the article dated April 15, 2025, is that ExxonMobil, the operator of the Stabroek block, was allowed to flare indiscriminately.
The EPA made it clear that this is patently untrue, since ExxonMobil was fined almost $1 billion for non-routine flaring, monies which the oil major cannot recover under the cost oil terms laid out in the 2016 Stabroek Block Production Sharing Agreement (PSA).
“Following an unanticipated mechanical failure in the gas compression system on the Liza Destiny FPSO in 2020-2021, the EPA moved swiftly to; (i) Amend the environmental permit for Liza Phase 1 (May 2021) to formalise conditions for non-routine flaring,” EPA said.
According to the EPA, it also introduced “a carbon pricing mechanism, requiring the operator to pay for CO2 emissions from excess flaring. The fee was increased from US$30 to US$45 per tonne of CO2, reflecting the EPA’s firm application of the ‘polluter-pays’ principle.”
EPA noted that this method has been so effective, that as of 2023, mechanical failure- induced flaring on board the Liza Destiny Floating Production Storage and Offloading (FPSO) vessel has been eliminated. There has also been no excess flaring throughout last year, further proof that Exxon has been complying with its permit.
The article also referenced a 2023 ruling by the High Court, in which it said that the EPA acted within the confines of the law by modifying Exxon’s permit to permit flaring within certain parameters and to impose the fine.
“This Court ruling reaffirmed the Agency’s authority to act proactively to regulate environmental risks, while avoiding undue harm to the national interest,” EPA pointed out, also making it clear that it has continued to act against any violations.
According to the EPA, it has established an Environmental Emergency Response Unit, comprising trained officers, who are equipped with incident response tools to monitor, investigate and respond to pollution incidents, including those related to the oil sector.
“The Agency has introduced real-time environmental data reporting for offshore platforms and maintains round-the-clock oversight, using vessel traffic tracking and emissions monitoring systems.”
“The EPA has continuously been strengthening its monitoring and enforcement framework, keeping it aligned with international best practices and the Environmental Protection Act, Cap. 20:05,” the agency added.
Another issue debunked in its statement, were claims that it has not been inclusionary by consulting with indigenous and local communities. As a matter of fact, the agency has been holding consultations for every Environmental Impact Assessment (EIA).
“The EPA is under no illusion about the task at hand of protecting the environment, while also enabling sustainable national development. The Agency, however, embraces the challenges of governing a rapidly evolving extractive sector and remains committed at all times to legal compliance and transparency, continuous stakeholder engagement, accountability of permit holders, and adaptive improvement of regulatory systems and environmental safeguards.”
