It is increasingly clear that ExxonMobil’s business of unbridled extraction of oil offshore Guyana has taken pre-eminence over responsible governance and regulatory authority.
There is no starker evidence of this than the contentment, if not jubilation, in government circles that US$607m in Guyana’s oil earnings will be emptied from the nascent Natural Resource Fund into the Consolidated Fund for expenditure this year. The debate is now being shaped around what prestige projects this sum will be spent on instead of the repercussions of this huge injection into the economy and most importantly whether the take thus far shouldn’t have been much higher. Suggestions that Guyana could rebalance this injustice through the Local Con-tent law is unmitigated rubbish. Guyana should benefit from a higher take from the 2016 Production Sharing Agreement (PSA) in addition to the advantages of the Local Content law. President Ali appears unmoved by the injustice of the 2016 PSA and will therefore also be held accountable for allowing ExxonMobil and its partners to cart off more than should have been permitted.
This indulgence of ExxonMobil and its partners has also enfeebled regulatory bodies to the detriment of ordinary folk and the environment. On two occasions Stabroek News has reported about East Coast fishermen complaining about being chased off from fishing areas by vessels supporting ExxonMobil’s operations. More specific information has to be provided by the fishermen but over the period of three weeks the regulatory authorities have shown disinterest in this matter. There has been no word from the Minis-try of Agriculture, the Fisheries Department, the Maritime Administration Department or even the Coast Guard as it relates to the liberties that might have been taken by the support vessels which have chased away these fishermen from their customary grounds.
ExxonMobil has not been able to shed much light on the claims by the fishermen but it did make an interesting revelation that compensation had been paid to some fishermen who would have been affected by the landing of a fibre optic cable to service ExxonMobil. According to ExxonMobil, the “Fisheries Department identified several licensed fisher folk with pens that required removal from the approved installation route. These individuals have been compensated, the value of which was determined by several factors including information from the fisher folk themselves, Fisheries Department, market value and administrative costs”. This was news to the entire country as there had been no word from the authorities. Surely the Ministry of Agriculture as part of the transparency required under the Escazú Agreement and the Extractive Industries Transparency Initiative should have advised the general fishing community and the public as to these terms. Why should this process be only in the purview of ExxonMobil and the Fisheries Department?
Just as troubling is the apparent concordat between the government and ExxonMobil as it relates to the conduct of the Environmental Protection Agency (EPA). Last week, without any prior notification or explanation, the EPA posted on its website a “varied and modified” environmental permit for the Liza Phase 2 Development Project – oil from which should begin flowing later this year.
At whose behest was this permit varied? Shouldn’t there have been notice of the intent to vary? Shouldn’t government and the EPA have explained to the public the rationale for this amendment? The variation appears intended to enable the continued reckless flaring of gas during extraction operations for Liza-2 supposedly mitigated by the payment of a fee. Any permitting of flaring in the context of the climate change exigencies is surely in favour of ExxonMobil and the variation of its permit should have been subjected to more careful consideration and the involvement of Parliament’s Natural Resources Sectoral Committee.
The EPA also remains inscrutable on the Environ-mental Impact Assessment (EIA) for the Yellowtail well, what will be ExxonMobil’s fourth and largest development. ExxonMobil and its partners had avoided much scrutiny for its Liza-1, Liza-2 and Payara developments but a number of environmentalists, civil society personages and regional groups have mobilised to pick apart the Yellowtail EIA. Public hearings hosted by ExxonMobil which were previously perfunctory and without any informed engagement saw substantial transformation for Yellowtail. The EPA was peppered with questions – many of which remain unanswered – and credible doubts were raised about the work of ERM, the consulting company which put together the EIA. One of the damning questions surrounded the appearance of a signature on part of the work which should not have been there and for which ERM subsequently apologised.
As part of the Yellowtail project, ExxonMobil plans to drill between 40 and 67 wells over the 20-year duration of the investment. Over 250,000 barrels of oil per day will be targeted once production commences. Based on the schedule, once approval is granted, engineering commences in 2022 and production in the latter part of 2025. With the major questions facing it over the Yellowtail EIA one would have thought that the EPA would have moved rapidly to at least have the outstanding questions answered prior to a decision on whether an environmental permit for the project will be issued.
Nothing has been heard over the last month from the EPA and the worst possible outcome would be its ignoring of the important issues raised which would them move the process to the appeals stage where there is no guarantee of a satisfactory outcome.
As has been the case from its first announcement of the discovery of oil here in 2015, ExxonMobil has smoothly navigated the corridors of power and has had its way with the extraction of Guyana’s oil to the detriment of the country’s coffers. Unbelievably, it has done this with the acquiescence and complicity of two governments. The scales must now be rebalanced.
