Guyana Passes Landmark Law Making Companies Liable For Oil Spill Damages

Guyana’s National Assembly has passed a major oil pollution bill that will hold oil companies and offshore operators fully responsible for damages caused by oil spills.

The bill, approved late Friday through a voice vote, is now awaiting the signature of President Irfaan Ali to become law. The country, whose offshore oil production is managed by a consortium led by Exxon Mobil, is set to exceed 900,000 barrels per day (bpd) this year.

According to Guyana’s Finance Ministry, the oil sector grew by 58% in 2024, making the country the fifth-largest crude exporter in Latin America after Brazil, Mexico, Venezuela, and Colombia.

The new law aims to strengthen environmental protection and oversight of the offshore oil industry. It requires oil companies to provide financial assurance to cover any spill-related damages, conduct regular inspections, and fix potential risks found during audits.

Companies that fail to comply with these rules may face penalties, including suspension of their licenses to explore or produce oil.

The Civil Defense Commission (CDC) has been named the national authority to coordinate oil spill responses and monitor ongoing safety measures. The CDC will be responsible for overseeing routine checks and ensuring that oil operators are following the necessary safety protocols.

Lawmakers in support of the bill said that the country’s fast-growing oil industry needs stronger environmental safeguards. They argued that companies benefiting from Guyana’s offshore resources must take full responsibility for preventing and addressing pollution.

Exxon’s consortium, which includes U.S.-based Hess and China’s CNOOC, produced an average of 631,000 bpd in the first quarter of this year, up 3% from the same period last year.

Their production comes from the massive Stabroek Block, where three floating production, storage, and offloading units (FPSOs) are already operational.

A fourth FPSO, named One Guyana, arrived in the country last month. Built by SBM Offshore, it has the capacity to produce 250,000 bpd, which is expected to boost total output to around 940,000 bpd later this year.

Reference: Reuters

Source: Maritime Shipping News