US supermajor ExxonMobil has agreed to provide $600 million insurance money in the event of an oil spill at any of its offshore operations in the Caribbean Community nation officials said Friday.
The company had been feuding with Guyanese authorities and rights groups in recent months over the amount it should set aside in the event of an oil spill at its lucrative Stabroek Block where more than 25 successful wells have been drilled since its first discovery in mid-2015. Exxon is operating through its local subsidiary, Esso Exploration and Production Guyana Limited (EEPGL).
Company spokesperson Janelle Persaud Friday said that an announcement this week by government that Exxon has agreed to set aside $600 million “per event” is accurate. “That is what we are talking about. It is embedded in the permits,” she said.
Rights groups and opposition parties have been pressuring government to ensure there is a fund to clean up and manage oil spills. Government had demanded a $2 billion dollar figure but the two sides say they have now agreed that a $600 million “per event” figure could suffice in the event of an environmental disaster even as negotiations continue regarding a $2 billion oil spill guarantee from the Texas-based parent company.
The main opposition APNU-AFC coalition has already submitted a motion to parliament to debate full coverage insurance for Exxon. Parliament is yet to debate it.
Actual production from the block began in December 2019, making the former British colony one of the world’s newest producers. The 2015 oil shout has ensured that most of the world’s leading companies including Repsol of Spain, Tullow Oil of the United Kingdom have moved to drill exploratory wells near the Stabroek Block.
Oil has also been found in two neighboring blocks, Canje and the Corentyne Block where upstart Canadian junior explorer CGX Energy recorded well successes earlier this year.
So far Exxon says its bloc contains more than 10 billion barrels of oil so far. The US Geological Service has long estimated that the Guyana-Suriname basin contains at least 16 billion barrels of oil offshore.
Neighboring Suriname, one of CARICOM’s most resource-rich companies has also cashed in on the lucrative basin where several joint venture companies have found a number of gushing wells just across the marine border with Guyana. Actual production should begin in about two years.