The American oil giant Exxon Mobil, which had appealed a decision that forced it to provide “unlimited” insurance for environmental cleanup in the event of an oil spill or leak, partially won its case Thursday before the Guyana court.
Appeals Court Judge Rishi Persaud stayed the High Court’s ruling requiring Exxon to provide “unlimited” pollution insurance by June 10, on pain of a ban on operation.
However, the Guyana Court of Appeal ordered Exxon Mobil to submit a $2 billion guarantee to the Environmental Protection Agency (EPA). The company has ten days to deposit that amount.
On May 3, the Guyanese High Court decided that the Exxon-led consortium should provide “unlimited and uncapped insurance for all costs associated” with the “cleanup and restoration of all damage caused” by the possible “discharge of any pollutants resulting from their activities” off the coast of Guyana.
Exxon executives then announced that they would appeal, alleging that the ruling would force them to stop their production of 155,000 barrels per day in this South American country, with an estimated deficit of 350 million dollars per month while this situation lasted.
Exxon, which heads a consortium also made up of China National Offshore Oil Corporation (CNOOC) and Hess, stressed that the suspension of production would cause additional losses due to the costs of maintaining a flow in the wells.
The president of Exxon Mobil Guyana, Alistair Routledge, had estimated that the eventual cessation of production would have “significant financial consequences for all investors, but also for the country in terms of lost income.”
With a population of about 800,000, Guyana, located in northeastern South America, has the largest reserves per capita in the world. Specialists estimate that the Guyana-Suriname basin contains around 15,000 million barrels of oil reserves associated with important gas fields.
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