ExxonMobil appeals ruling by Guyanese court in oil spill insurance coverage

GEORGETOWN, Guyana (AP) — American oil giant ExxonMobil said Friday it had appealed a recent Guyanese court ruling requiring it to obtain insurance for “unlimited liability” in the event of a major oil spill off the coast of Guyana.

The company said in a statement that the court had failed to consider that Exxon and consortium partners Hess Corp. and China National Overseas Offshore Corporation have the “undoubted ability” to meet their financial obligations in the event of a spill at their operation.

The consortium is operating the prolific Stabroek Block near the southeastern border with Suriname.

In the ruling two weeks ago, Guyana’s high court ordered the local environmental agency to obtain independent liability insurance from Exxon's subsidiary Esso Exploration and Production Limited. It also sought an unlimited guarantee from its parent company in the case of damage caused by operations in the South American country.

The company argues that no insurance company would provide unlimited coverage.

Guyana’s government said this week that it supports the appeal, contending the judge erred in the ruling in part because the environmental agency already has agreed with Exxon on the amount of money to set aside for each oil field to cover any damage from a spill.

Rights activists and environmentalists fear that a spill could severely harm the country’s marine resources while devastating the tourism economies of nearby Caribbean nations.

Exxon, the lead operator in the consortium, has argued that a spill is highly unlikely and that the court had “failed to recognize the ability of the Stabroek block co-venturers to meet our financial obligations, which are supplemented by the insurance that we already have in place and the agreement we reached with the EPA for financial guarantees that exceed industry benchmarks."

Production began in December 2019, with some 380,000 barrels a day expected to soar to 1.2 million by 2027.