Judge stays order for Esso to provide unlimited guarantee but orders it to lodge US$2B

ExxonMobil Guyana Headquarters in Georgetown

Although Justice of Appeal Rishi Persaud granted a stay on a High Court order for ExxonMobil’s local affiliate, Esso Exploration and Production (Guyana) Limited (EEGPL) to provide an unlimited parent company guarantee for its oil operations offshore, he also ordered the company to lodge a US$2B guarantee pending the hearing and determination of an appeal against the lower court’s decision.

In delivering his judgement on Thursday on the merits of the appeal filed by the Environmental Protection Agency (EPA), which he noted has a good prospect of success, Justice Persaud was keen to point out that his order for Esso to provide the guarantee is in “an effort to allay any anxiety as to any impending doom”.

He further instructed the oil company to provide same within 10 days, failing which the stay on the High Court order stands dismissed. The Judge, among other things, said that the interest of justice clearly mandates a stay of the High Court order that was issued by Justice Sandil Kissoon.

On May 3, Justice Kissoon issued an order directing the EPA to issue ExxonMobil’s local affiliate, Esso Exploration and Production (Guyana) Limited (EEPGL), with an Enforcement Notice on or before May 9, for the company to provide, within 30 days, unlimited Parent Company Guarantee Agreement and/or unlimited liability Affiliate Company Guarantee, together with environmental liability insurance, as is customary in the international petroleum industry.

EPA’s Executive Director, Kemraj Parsram had confirmed that the Agency has issued EEPGL with the Enforcement Notice. Since Justice Kissoon’s order has been suspended, the oil company no longer has until today to comply with that notice.

The High Court order has its origin in a case filed in September 2022, by the President of the Transparency Institute of Guyana Inc (TIGI), Frederick Collins and Guyanese citizen Godfrey Whyte who had moved to the court to get the EPA to enforce the liability clause in the permit.

They wanted the court to ensure EEPGL takes full financial accountability in the case of harm, loss, and damage to the environment from a well blowout, oil spill, or other failures.

EPA and Attorney General Anil Nandlall, SC, has maintained that the Environmental Permit granted to Esso imposes no obligation on the company to provide an unlimited Parent-Company Guarantee Agreement and/or Affiliate Company Guarantee Agreement.

If Justice Kissoon’s ruling is not set aside, the government has argued that it could have profound ramifications and grave economic as well as other impacts on the public interest and national development. The full Bench of the Court of Appeal is expected to set soon to hear EPA’s substantive appeal as lawyers have implored the court to deal with the matter expeditiously.