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Posts Tagged ‘OPA 90’

Comments on the operator responsibility and unlimited liability provisions of Guyana’s Oil Spill Bill

Posted in Guyana, oil spill response, Regulation, well control incidents, tagged , , , , , , on June 6, 2025| Leave a Comment »

Guyana’s Oil Spill Bill (attached) has much in common with the Oil Pollution Act of 1990 that we implemented for US offshore faciities and the International Convention on Oil Pollution Preparedness, Response and Co-operation that I attended in 1990. A couple of issues warrant highlighting:

Operator/licensee responsibility:The definitions correctly establish the operator or license holder as the responsible party. This means that in the event of a well blowout while drilling from a mobile drilling unit, the licensee/operator would be the responsible party. This aligns with the “operator responsibility” mantra that is fundamental to the US offshore program. Drilling and other contractors are managed by the operator and are the operator’s responsibility.

Unlimited liability: The liability section (Part VI) establishes an unlimited liability standard for the responsible party. As previously discussed in more detail, this is a daunting, open-ended obligation that would trouble permittees in any industry. The unlimited liability provision could preclude responsible independent operators, including Guyanese companies, from seeking licenses.

The unlimited liability standard (par. 17) is qualified with a provision (pasted below) that also favors major international companies.

The unlimited liability provision therefore does not seem to apply to parent companies idemnifying a project. This was a point of contention during the parliamentary debate. The Kaieteur News delves into the issue and is not entirely convinced by the Government’s defense. Their article closes as follows:

It is important to note that stakeholders have argued that since ExxonMobil Guyana Limited (the responsible party) does not have adequate assets, the burden of oil spill-related costs could be left on Guyana, especially in the absence of unlimited coverage from the parent company. These and other “flaws” have prompted Guyanese to urge President Irfaan Ali not to assent to the Bill, passed in the National Assembly on May 16, 2025. Be that as it may, the Ministry maintained that the “robust statutory framework now established protects Guyana and its people.”

Oil-Spill-Bill-2025Download

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Cleanup Costs

Posted in accidents, well control incidents, tagged , , , , , , , , , , on May 3, 2010| Leave a Comment »

Let me be clear: BP is responsible for the leak; BP will be paying the bill. President Obama

While this is clearly the case for “removal costs,” damage costs are a different matter.  The Oil Pollution Act of 1990 establishes liability limits as follows:

for an offshore facility except a deepwater port, the total of all removal costs plus $75,000,000;

With regard to maximum liability, a MODU like the Horizon would be treated the same as an offshore facility.  Removal costs are “costs to prevent, minimize, or mitigate oil pollution,” not economic costs to affected parties.

The liability limits do not apply in the event of  “(A) gross negligence or willful misconduct of, or (B) the violation of an applicable Federal safety, construction,or operating regulation by,the responsible party, an agent or employee of the responsible party, or a person acting pursuant to a contractual relationship with the responsible party.”

The legal battles have already begun and will last for at least a decade.

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