High Court rules ExxonMobil, State must be added to case for release of insurance for Liza 2 project

Last Updated on Wednesday, 26 June 2024, 13:14 by Writer

ExxonMobil’s Guyana office, Duke Street, Kingston, Georgetown.

High Court Judge, Simone Morris-Ramlall on Monday ruled that ExxonMobil Guyana Limited (EMGL) and the Attorney-General of Guyana must be added as parties to a case brought by civil society activist, Sherlina Nageer demanding disclosure of the insurance policy and parent/affiliate company guarantee for the Liza Phase 2 project, according to the company’s lawyers and Attorney General Anil Nandlall.

“Justice Morris-Ramlall found that EMGL had a clear interest in the outcome of the matter, as it would be very adversely affected if the Applicant were to succeed as it would lose its Permit making it unable to carry out its Project, which could cause it to suffer substantial loss and damage.

The Court ruled further that the AG also had a definite interest in the outcome of the case given Government’s reliance on substantial petroleum revenues from the Project for its development agenda. Further, the Court also ruled that the new Petroleum Activities Act now made it mandatory for the State and any licensee who would be adversely affected to be made parties, which the Applicant had palpably failed to do,” lawyers for EMGL said in a statement. The Attorney General’s Chambers said the High Court ruled that Section 94 (1) of the Petroleum Activities Act 2023 requires that the State, as of right, must be added to proceedings seeking to cancel, prohibit the grant of, or dictate the terms of, environmental permits granted to ExxonMobil Guyana Ltd, and its partners.

Justice Morris-Ramlall ordered the Applicant Ms. Nageer to pay costs to the Attorney General and ExxonMobil Guyana Limited in the sum of $300,000 each. The matter is continuing and now the company and the Attorney General would be allowed to defend the claim.

Monday’s decision is a ruling on a preliminary point in Ms Nageer’s action brought on January 25, 2024.

The company is represented by Attorneys-at-Law Andrew M.F. Pollard, SC, Edward A. Luckhoo, SC, Shawn Shewram and Eleanor Luckhoo. Ms Nageer is represented by Mr. Tim Prudhoe, Ms. Anna-Kay Brown and international lawyer Ms. Melinda Janki. The EPA is represented by Mr. Sanjeev Datadin and Ms. Frances Carryl. The Attorney General is represented by the Mr. Mohabir A. Nandlall, SC, and Mr. Chevy Devonish.

Ms Nageer wants the Environmental Protection Agency (EPA) to disclose the insurance/guarantee that was lodged by EMGL to cover environmental liability from that project.

She also demanded copies of the policy and guarantee documents, as she claimed that although the EPA had responded to her confirming that EMGL had lodged the guarantee and the policy, members of the public including herself are entitled to satisfy themselves that EMGL had in fact done so, and the only way they could ensure that the EPA was carrying out its responsibilities was if they are given copies of the documents.

The Applicant claims that she is a member of the public and that the EPA are the statutory agency given sole responsibility by Parliament for environmental supervision of petroleum companies including EMGL, and ensuring their compliance with Guyana’s environmental laws.

She claimed that she through her Attorneys-at-Law enquired of the EPA whether EMGL had lodged the insurance policy and guarantee as required by the environmental permit issued by the EPA for EMGL’s Liza Phase 2 Project.

She further asked the Court that if the documents are not produced, to make a declaration that EMGL’s permit for the Project was cancelled, and for orders(s) against the EPA prohibiting it from issuing any replacement permit, or any permit with weaker requirements than the cancelled one.

EMGL and the Attorney General had filed applications to the Court ordering that they be joined as parties to the litigation. EMGL contended that if its Permit was cancelled as the Applicant is seeking, they would suffer serious financial loss and damage as they would be unable to carry out their petroleum project. They also contended that this would be a deprivation of their property rights which would be unlawful unless they are allowed to defend their rights. The Attorney General claimed that the State’s budgets enjoyed substantial revenue flows from the Project and that Government’s developmental agenda would be seriously interfered with if the Project was halted as the Applicant sought.

The Attorney General’s Chambers states that the State, in particular, argued that Section 94 (1) of the Act mandates that the Minister of Natural Resources be added as of right to these proceedings, as they constitute proceedings which arise out of the Act which affect the interest of the State. It was argued that the proceedings could impact the environmental permit regarding Liza Phase 2, and that such an eventuality could trigger the cessation, even if temporarily, of that project.

The State further argued that an order cancelling the permit, or prohibiting the grant of a new permit could negatively affect Government’s intended revenue from royalties and Guyana’s share of profit oil, public infrastructural works to be funded by that revenue, and could pose additional legal issues for Guyana.