An appeal court judge in growing oil producer Guyana today suspended an order by a lower court that US major ExxonMobil provide by 10 June an unlimited guarantee to cover any oil spill at its Liza 1 project on the deepwater Stabroek block.
The suspension of the order will prevent the company from losing its permit for the Liza-1 well that is producing about 150,000 b/d.
But the appeal court judge ordered ExxonMobil to make a $2bn security deposit within 10 days.
The dispute will be adjudicated by the country's full court of appeal on a date to be set.
Neither the company nor the government — that opposed the order for an unlimited guarantee — has commented on today's ruling.
Both had sought a stay of the order to suspend the company's permit to operate for failing to provide an unlimited guarantee which will safeguard against the dangers of an oil spill.
ExxonMobil and its partners already have "the right measures" in place to prevent, mitigate and pay for a clean-up in the event of an oil spill, the company argues.
The challenge to ExxonMobil's Liza 1 project was filed in September 2022 by environmental lobbies that contended the company was not providing adequate guarantees to compensate for any oil spill.
ExxonMobil was involved in "a disingenuous attempt" to reduce its obligations under its environmental permit for the Liza 1 project, Guyana's high court had ruled.
The company had been allowed to do this because of "the omissions of a derelict, pliant and submissive environmental protection agency," it said.
The dispute involves only the company's Liza 1 project and not Liza 2 that is also on the Stabroek block.
ExxonMobil started production in 2019 from Stabroek in which it has a 45pc stake, with US independent Hess holding 30pc. Chinese state-owned CNOOC unit Nexen has a 25pc share. The consortium is the only producer in the country.
The consortium's crude output in the first quarter averaged 378,340 b/d against 121,100 b/d in the corresponding 2022 period.
