This article is inspired by the numerous public discourses and concerns appearing in the press on this subject matter of an oil spill, especially given that there is apparently no provision (s) for this in the oil contract (s). More so, this author noted an article carried in sections of the media on March 25, 2018, in which a seemingly prominent international lawyer advocated for the proposed oil production to be put on hold until the Government can show what an oil spill could cost Guyana. While this columnist would rather not venture into providing a position on whether such a suggestion to put production on hold is warranted or not, this article seeks to provide some degree of insight, inter alia, by conducting an assessment of what an oil spill could actually cost Guyana, and a suggestion of how to deal with this in the event this risk is materialized; the country needs to be prepared nonetheless. In doing so, the author examined the cost of one of the most recent oil spills as a basis in this regard, and will then conclude within the context of Guyana.
“Calculating economic and environmental damages from any oil spill, let alone the size of BP’s Deep-water Horizon, is a difficult job. This difficulty arises for many reasons: our economic system does not directly value wildlife killed or damaged; it is hard to calculate the very tangible ecosystem services that are impaired when parts of the environment, like marshes, are oiled and die. Also, the spill results in some immediate obvious effects we can measure today, but there will also be long term, subtle impacts that are just beginning to be identified. For example, certain fish populations in Alaska did not crash until three years after the Exxon-Valdez spill”, (Environment America, Research & Policy Centre, 2011).
An Overview of the BP Oil Spill
The BP oil spill occurred in 2010, when the Deep-water Horizon oil rig exploded into the Gulf of Mexico, releasing 4.9 million barrels of oil into the Gulf of Mexico and causing a grave amount of damage to the surrounding areas, both environmentally and economically. The states that were more severely impacted were: Louisiana, Mississippi, Alabama, Texas, and Florida. The main stakeholders with respect to the spill were the environment, wildlife, fishermen, the oil industry, tourist-driven businesses, and communities. 
Directly following the oil spill, BP set up the Gulf Coast Claim Facility (GCCF), which was later deemed not independent and was later replaced by a court-supervised settlement programme. Three years after the oil spill, BP announced that the compensation fund was running low, but they would continue to pay settlements from their profits. In spite of this commitment, BP attempted to stem the flow of incoming claims using several methods, including suing the court-appointed administrator and appealing claims. In January 2013, BP pleaded guilty to 11 counts of felony manslaughter, one count of felony obstruction of Congress, and violations of the Clear Water and Migratory Bird Treaty Acts. BP was sentenced to pay US$4 billion in fines and penalties. The Deep-water Horizon Spill has shown that the regulation for spill prevention and response is inadequate. As the oil companies will act in the best interest of themselves, it is the duty of the Government to set regulation in place in the interest of the health and safety of its citizens. The Government needs to act to create tighter controls on oil companies, to decrease the likelihood of a repeat occurrence (Brennan, 2013). To be continued next week.
The Author is the holder of a MSc. Degree in Business Management, with concentration in Global Finance, Financial Markets, Institutions & Banking from a UK university of international standing.
