Last Updated on Saturday, 20 May 2023, 15:13 by Denis Chabrol
The Private Sector Commission (PSC) on Saturday urged Guyanese to strike a balance between the need to earn revenues from the oil and gas sector and the need to ensure there is sufficient cash to clean up after an oil spill.
“It is inconceivable that any sensible Guyanese would consider reversing this massive progress but, yes, every sensible Guyanese must also consider the absolute need to also sustain and protect our environment and guard against the unlikely and highly improbable event of an oil spill and its consequential fallout,”
Expressing concern about the controversy over Justice Sandil Kissoon’s order that the Environmental Protection Agency (EPA) must enforce Esso Exploration and Production Guyana Limited (EEPGL) provision of adequate insurance and unlimited financial guarantees to finance the clean-up of an oil spill, the PSC referred to Attorney General Anil Nandlall’s position that “the Government’s developmental agenda is inexplicably bound to the revenues and economic activities generated from and by the oil and gas sector”.
Through the EPA and ExxonMobil’s appeals against the judgement of Justice Kissoon, the PSC said it was looking forward to the legal issues being clarified and having an amicable resolution.
The PSC claimed that since the discovery and production of oil four years, the lives of “each and every” Guyanese have been impacted by significant infrastructure and transformative developments. The construction of the new Demerara Harbour Bridge and the Gas to Energy Project are in their very early stages.
That business organisation referred to capital investments made by Exxon and its partners, amounting to date, of US$20 billion in the Stabroek Block and committed investments amounting to some US$45 billion. “We have already begun to benefit hugely from these investments which are projected to exceed some US$200 billion over their lifetime,” the PSC added. According to that apex private sector body, thousands of small and medium scale businesses have been created/developed in Guyana over the past few years and are finally gaining a foot hold in a thriving and dynamic economy, and substantial road and bridge capital works of highways extending across the length and breath of Guyana, opening up the massive potential for agricultural and mining development and transportation of goods and services.
Critics of the government and the oil sector have repeatedly said they are hard-pressed to see the trickle down effect of the oil economy on the broad masses of Guyanese.
According to the PSC, the massive capital investments and Foreign Direct Investment have seen an unprecedent demand of unskilled, skilled and technical labour resulting in significant increases in salaries in the Private Sector alone. The PSC said four years ago, unskilled labourers earned GY$3,000 to GY$4,000 per day; today but today they earn between GY$8,000 to GY$10,000. “This significant increase in wages is replete in all spheres of employment across Guyana as a result of the Oil & Gas Sector,” the PSC said. However, local home builders are crying out at the increased cost of construction due to a huge spike in materials such as sand and cement and high labour costs.
The PSC seemed comforted by assurances that the chance of a well blow-out is very rare and that ExxonMobil, Hess and CNOOC have agreed to seek affiliate guarantees and provide financial resources committed to meeting their obligations, should there be such an occurrence.
ExxonMobil and its co-venturers could lose at least US$350 million monthly in revenues if the Court of Appeal does not later this month suspend High Court orders that require the Environmental Protection Agency (EPA) to enforce insurance and unlimited financial guarantees and the companies fails to secure them.
The EEPGL parent company said it has subscribed to a capping stack to reach and seal a blown-out well in just over five days and the company has already obtained US$600 million in insurance, local affiliates have US$18 billion to US$19 billion of financial assets in Guyana and US$2 billion in financial guarantees by affiliates of the local companies to finance the cost of an estimated clean up.
ExxonMobil and the EPA have not only appealed Justice Kissoon’s decision but has asked the Court of Appeal to grant a stay of the High Court’s orders pending the outcome of the appeal. If the stay is not granted and ultimately the applicants, Fred Collins Godfrey Whyte win their appeals, the companies would have to comply or suspend operations at Liza 1.