Why ExxonMobil Shareholders Should Vote For Resolution #10, Worst-Case Spill And Response Plans

By Darshanand Khusial

News Americas, NEW YORK, NY, Fri. May 26, 2023: ExxonMobil will have its annual shareholder meeting on Wednesday May 31st, 2023. During this meeting shareholders will vote on a number of resolutions raised. These resolutions were outlined in its 2023 Proxy statement, a copy can be found HERE.

Shareholder resolution #10 is concerned with Guyana and seeks additional reporting on worst-case spill and response plans. ExxonMobil recommends shareholders vote against resolution #10. However, ExxonMobil reasoning as to why shareholders should reject resolution #10 contains a number of questionable statements.

ExxonMobil claims that by resolution #10 using the word ‘fine’ instead of ‘fee’ for the replacing the gas compressor makes the proposal guilty of mischaracterization. A fee is what one pays for a service or privilege. Example, one pays tuition fees. A fine is paid for breaking the law or regulation. Example, one pays a fine for parking illegally. Thus, are we to believe that EEPGL (Esso Guyana) pays Guyana for the privilege of emitting CO2 and dangerous pollutants into the atmosphere? Here is what the Ministry of Natural Resources stated on September 30th, 2020, “Esso Exploration and Production Guyana Limited (EEPGL) will pay the Government for the cost of gas wasted during flaring and will also be subject to fines under the EPA related to emissions from flaring.”

ExxonMobil’s response to resolution #10 claims that “above design capacity” relates to investment basis and the actual volume that is safe to produce is well above the design capacity. When we checked the Environmental Impact Assessments published for Liza 1, see here, where it states this on page 28, “The FPSO will be designed to receive the full production wellstream from the development wells and will process crude oil at a design rate of 100,000 barrels of oil per day (BOPD), with potential to safely operate at sustained peaks of up to approximately 120,000 BOPD.”

According to the Government of Guyana charts, Liza 1 has been producing oil at 150,000 barrels a day for several months now. The Liza 1 EIA states nothing related to investment basis. Liza 1 EIA states that 100,000 BOPD is what should be the target rate of oil production, not 50% above that limit. We fail to locate where in the Liza 1 EIA document it states producing above design capacity is safe.

Given the above findings, we support the ExxonMobil shareholders to vote in favor of shareholder resolution #10. It is imperative that all stakeholders – namely shareholders, Guyana and its neighbors – are aware of a worst-case spill and response plan that details the economic, human, and environmental impacts of an oil spill given that Liza 1 & Liza 2 oil projects are operating well above the safety limits as per their EIAs.

EDITOR’S NOTE: Darshanand Khusial is an executive OGGN Other executive members include Alfred Bhulai, Andre Brandli, Janette Bulkan and Joe Persaud.