ExxonMobil will step up financially in case of oil spill – Project Manager

…says mitigation measures make oil spill unlikely

Prevailing concerns have been expressed during oil giant ExxonMobil’s scoping meetings as to what will transpire in the event of an oil spill and according to the oil company, they are willing to step up to the plate and meet the financial cost in that event.

ExxonMobil recently held a public disclosure meeting for the Yellowtail project, which they are looking to start up in 2025. The meeting, a virtual one, was hosted by the Environmental Protection Agency (EPA) and discussions centred on the Environmental Impact Assessment (EIA) for the project.
During his presentation, Esso Exploration and Production Guyana Limited (EEPGL) Project Manager Steve Laws acknowledged the concerns Guyanese have about oil spills, in particular the financial repercussions on the country. He assured, however, that Exxon would take care of its fiduciary responsibility.
“Our first priority with all parties is to put in place the mitigation. What we showed in the modelling, if something was to happen, that’s unlikely. Now if something did happen, we’d take that responsibility and pay the cost in that event. We have the financial capacity to meet that responsibility… [both] under Guyanese law and the petroleum agreement as well for the Stabroek Block,” he explained.
Laws went on to note that insurance is only one source of financing that can be used, noting that it will not prevent or delay a response to an oil spill. According to him, the purpose of insurance is really to recover any costs after the fact.
“We do have insurance for those sorts of issues. But as I said we have the capacity and responsibility to pay the cost for any incident. And we are here for the long term. So, it is in our interest and the Government’s interest to tackle any incidents that do occur.”
Meanwhile Anna Sunby, who was one of the Environmental Resource Management (ERM) consultants that participated during the call, explained that Exxon is focused on keeping its mitigation measures as transparent as possible.
“In terms of mitigation, we’re really focusing here on transparency, sharing information and having that continued engagement both around the project activities in general and around oil spills response programmes and the measures that will be in place for emergency preparedness and response. Including also the fishing communities along the coast,” she said.
Todd Hall, another member of the ERM consultants present during the meeting, added that the EIA Exxon submitted contains details about the mitigation measures Exxon will pursue in the event of an oil spill.
“The EIA has got an oil spill response plan provided with it. It has all the processes and procedures that will be implemented. There are a number of tools that would be used to respond to the spill. Some of the comments we would see during scoping were related to compensation for losses that occur during the oil spill. The EIA does have a claims and liability mediation discussion in it, which addresses that compensation. Additionally, EEPGL and its partners do maintain insurance coverage, which includes coverage for liability.”
ExxonMobil has said it anticipates at least six projects offshore Guyana will be online by 2027, with developmental drilling recently starting on the second one, the Liza Phase 2 project. Back in May 2019, EEPGL was granted approval by the Environmental Protection Agency (EPA) to go ahead with its Liza Phase 2 Development offshore Guyana.
The oil company had said that the project will have the capacity to produce 220,000 barrels of oil per day. Exxon had also revealed that the Liza Phase 2 development was funded at the cost of some US$6 billion, including a lease capitalisation cost of approximately $1.6 billion, for the Liza Utility FPSO vessel. For the Phase 2 Development, six drill centres were planned, along with approximately 30 wells – 15 productions, nine water injection and six gas injection wells.
The US$9 billion Payara development, the third development, will meanwhile target an estimated resource base of about 600 million oil-equivalent barrels and was at one point considered to be the largest single planned investment in the history of Guyana.
The Yellowtail development, which will be oil giant ExxonMobil’s fourth development in Guyana’s waters, will turn out to be the single largest development so far in terms of barrels per day (bpd) of oil, with a mammoth 250,000 bpd targeted. (G3)