Foreign oil companies to be under strict EPA watch

Head of the Environmental Protection Agency (EPA), Dr Vincent Adams, has stressed that companies, especially foreign companies coming to operate in the local oil and gas sector, will have to strictly adhere to Guyana’s laws.
“There is some who still believe they can come in and own the entire country, and of course, we are going to stand up to them and ensure our laws are met and adhered to,” he stated at a business luncheon on Wednesday hosted by the Guyana Manufacturing Service Association (GMSA).
He referred to the mud spill just recently in December from which fines amounting to a total of approximately $2 million were collected. Spanish oil company Repsol and United Kingdom-headquartered Volaris Drilling were fined some US$5000 each for the mud spill which occurred offshore Guyana in the Kanuku Block.
It was reported that the UK company was conducting drilling operations in the Kanuku Block when a valve was left opened and resulted in the mud used to prevent well blowouts spilling into the ocean. Repsol is the operator of the Kanuku Block.
According to the EPA Director, companies will have to be held for these incidents.

It was against this backdrop that he noted a $2.5 billion liability coverage insurance was secured from another oil operator, Esso Exploration & Production Guyana Limited (EEPGL), in the case of an oil spill. EEPGL is the local subsidiary of United States oil giant, ExxonMobil, which is the operator of the Stabroek Block where there have been 16 oil discoveries and has already started production.
He noted that Esso Exploration was forced to take out maximum insurance coverage since the company is a limited liability one.
“Their liability is limited, they don’t have any assets so they could declare bankruptcy and we could be stuck with the bill. Of course, Guyana can’t afford if something happens, we really suck,” he stated.
To this end, Dr Adams said that EEPGL was asked to put in a guarantee but said they could not and as such, he held off approving their permit.
“I say, well it’s not going anywhere. That permit on my desk did not cost me anything.”
However, at that point, its parent company, Exxon, stepped in and took over the coverage of any amount “above and beyond” the insurance sum.
“At least we’re covered if anything happens…,” he noted, adding that this was one of their major accomplishments as it is the highest liability coverage.
“We are in a better position now because we learned from all the experiences in the past. However. If it happens, we’ve got to have some way where the clean-up will be covered.”
According to Dr Adams, he is currently working on streamlining operations at the EPA, which he noted was in a disorganised back in 2018 when he took over the agency.

At the time, he revealed that they had uncovered over 500 permits expired some over 15 years ago. There was a culture at the agency, he explained, where people were not held accountable for not carrying out their responsibilities.
Nevertheless, he noted that within the last year, they have collected some $140 million from most of that 500, except for a few companies that did not want to get into compliance and have now gone out of business.
Dr Adams went on to outline that while the 1996 EPA Act does not contain specific provisions for the oil and gas industry, it does have broad mandates to guide the sector. This, he noted, is coupled with international standards that Guyana has adopted.
“We are lucky that we did not have to undergo what those countries had experienced in order to develop those standards… So standards are there that we’re adopting. In time, we will develop our own regulations but it doesn’t mean that it’s gonna be any different to what currently exists… our goal is to develop our own standards but it is not necessary to say that we do not have standards. Yes, we do; they are not ours but we may have the same standards when we look at it…” he asserted.