GEORGETOWN, May 9 (Reuters) - Guyana's environmental
regulator on Tuesday appealed a court decision that last week
declared that the agency and Exxon Mobil unit breached
oil-spill insurance obligations for the company's first offshore
project in the country.
Guyana's High Court Justice Sandil Kissoon said in his
ruling that Exxon "engaged in a disingenuous attempt" to dilute
its obligations under its environmental permit for Liza One
project by not fully meeting oil-spill insurance requirements.
It gave the company until June 10 to furnish Guyanese
authorities with a liability agreement from an insurance
company.
According to the court, Guyana's Environment Protect Agency
(EPA) allowed Exxon to continue the project even though the
company did not provide the necessary insurance guarantees. The
government last week rejected the court decision and said it
would appeal.
In his filing, the EPA's Executive Director, Kemraj Parsram,
said it is true that a permit issued by his office in May last
year requires a parent guarantee from Exxon to cover costs not
satisfied by its subsidiary for an oil spill. He added that he
did not agree with the court's interpretation that the permit
calls for this guarantee to be unlimited.
Liza One, the project that inaugurated Guyana's oil
production in 2019, has an environmental permit requiring the
provision of two forms of insurance coverage, one from the
affiliate that stands at $600 million in case of an oil spill,
and a parent guarantee committing to cover all costs beyond the
$600 million threshold.
Exxon last week said it was "disappointing that the court
failed to appreciate and acknowledge the financial capabilities
of Exxon Mobil Guyana and its co-venturers to meet their
obligations," and said the insurance was already in place.
Local Stabroek News reported Transparency Institute of
Guyana, an anti-corruption organization had questioned the
agency's appeal.
"The question is why a government would want to appeal such
a decision. Would that not be a pyrrhic battle? Would not a
government lose more support from the people than it gains even
if it won the argument?" the group said, according to the paper.
"The optics seem that there is a regulator that appears more
interested in protecting the company that it is supposed to be
regulating than the people of Guyana," Frederick Collins,
current head of Transparency Institute of Guyana, told Reuters.
Guyanese campaigners and environmentalists have previously
challenged the government permitting process, saying that oil
production fuels climate change and would damage the country's
coral reefs and mangroves.
(Reporting by Kiana Wilburg; Editing by Aurora Ellis)
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