Acting Chief Justice Roxane George-Wiltshire has declared that Hess Guyana Exploration Ltd (Hess) and CNOOC Nexen Petroleum Guyana Ltd (Nexen), do not need separate environmental licenses to conduct oil production here since they are covered under the licence issued to ExxonMobil’s local subsidiary Esso Exploration and Production Guyana Limited (Esso).
The Chief Justice made this declaration in a ruling handed down yesterday afternoon to a challenge which had been brought by political commentator Ramon Gaskin, whose argument has been that since the two companies—Hess and Nexen had no environmental permits allowing them to engage in oil exploration here, they ought not to have been granted any petroleum production licences.
He had been seeking orders from the court to so reflect. However, his application was denied.
Gaskin was contending that since such licences had been issued only to Esso, then it was only that company that could rightfully undertake oil production exploration through the petroleum production licence it has been granted.
In her ruling, however, Chief Justice George-Wiltshire declared the Petroleum Production Licence (PPL) issued to Hess and Nexen to have been properly issued, noting that since they operate under Esso, they are covered by the environmental licence issued to that company.
She explained that, there being a joint venture by Hess and Nexen, these companies would be covered by virtue of their operation under Esso which is the developer.
Declaring the PPL to have been properly issued by the minister to not only Esso, but Hess and Nexen as well, the chief justice said that the environmental permits were issued in relation to a project and that it was not necessary for it to be issued to each company which is a party to the petroleum agreement for the execution of the project.
The judge said that in accordance with Section 11 of the Environmental Protection Act, a developer is required to apply to the Environmental Protection Agency (EPA) for an environmental permit.
She noted that as defined in Section 10 of the Act, developer means, “the applicant for environmental authorization for a project or the State initiating a project.”
The chief justice pointed out further, that the Environmental Protection (Authorisation) Regulations also support submissions made on behalf of the minister that the authorization is granted in respect of a project.
Regulation 17(2) (b) states, “an application for an environmental authorization – shall be in respect of one project or facility.”
Against this background the judge said it is clear that the environmental authorization as evidenced in the environmental permit relates to the project.
Justice George-Wiltshire noted that Gaskin, through his attorneys, had relied on Section 14 (1) of the Environmental Protection Act, but said that it did not apply in this case, since in this case, Esso could be classified as the developer.
She said that it was this company that had applied for, and obtained the environmental permit, thus, there was such a permit in existence when the PPL was issued.
The environmental permit, she said, was in relation to a project involving the extraction of petroleum.
Section 14 (1) of the Act on which Gaskin sought to rely states, “a public authority shall not give development consent in any matter where an environmental authorization is required unless such authorization has been issued and any development consent given by any public authority shall be subject to the terms of the environmental authorization issued by the agency.”
The judge then referenced Section 8 of the Petroleum Act, which provides for the issuance of the petroleum production licence. The provision states, “no person shall search for, or get from, any land in Guyana petroleum except—(a) under and in accordance with a licence granted by the minister under this Act… .”
Further, Justice George-Wiltshire noted that in accordance with Section 9 (2) in Part IV of the Petroleum Act, Hess and Nexen, as companies, would satisfy requirements to be granted petroleum production licence.
That section states, ‘a licence may be granted to two or more persons associated together in any form of joint arrangement.’
The petroleum agreement speaks to Esso, Hess and Nexen being associated in a joint arrangement,” the judge said.
Justice George-Wiltshire said that the PPL is granted to Esso, Hess and Nexen as joint venture licensees, but that they are referred to as the licensee, based on Esso’s application representing all three companies.
She then noted that she agreed with submissions from counsel for the minister, that where liability is joint and several, the parties have jointly and individually promised to carry out the same promise or obligation; and that there is only one obligation by which they are all bound.
“I therefore do not agree that the effect of the joint and several obligations on Esso, Hess and Nexen means that each has a separate obligation to comply with the Environmental Protection Act by each obtaining an environmental permit,” the chief justice said.
She emphasized that they are bound to comply with the environmental permit issued to Esso by virtue of the petroleum production licence and the petroleum agreement.
Gaskin (the applicant) has been ordered to pay $100,000 court costs to the state.
Gaskin’s complaint before the court was against the decision of Minister of Natural Resources Raphael Trotman to grant a petroleum production licence to Esso as well as Hess and Nexen though the latter two were never granted environmental permits by the Environmental Protec-tion Agency (EPA).
In his application, Gaskin argued that not only do Hess and Nexen not have environmental permits to facilitate their exploration of oil here, but that they had also not carried out any environmental impact assessments.
It is against this background he contended that in the absence of being assessed by the EPA, there could be no payment of compensation for loss or damage by Hess and Nexen.
In the affidavit supporting his motion, Gaskin said that since Esso had been granted an environmental permit, Trotman, in accordance with Section 14 of the Environmental Protec-tion Act, was in order in granting a petroleum production licence to Esso alone.
He had said, however, that given the peculiar circumstances, Esso would have authorisation to continue with its petroleum operations, subject to the law, pending environmental permits also being lawfully granted to Hess and Nexen.
He argued that the benefit of the environmental permit issued to Esso cannot be extended to Hess and Nexen, since they have not been approved by the EPA under Section 13 of the Act, while adding that Esso does not have the power to share the benefit of the environmental permit with them.
Gaskin is of the view that the PPL issued could not be referable to all three companies in the absence of an environmental authorization for each of them.
In the challenge, Trotman was represented by the attorney general’s chambers, Senior Counsel Edward Luckhoo and attorney Eleanor Luckhoo.
Gaskin was represented by attorneys Seenath Jairam SC and attorney Melinda Janki.
Senior Counsel Andrew Pollard and attorney Nigel Hughes represented Hess and Nexen.
