Guyana’s National Assembly has passed landmark legislation that holds oil companies fully liable for any pollution damage, a move lawmakers say will safeguard the country’s environment as petroleum production soars. The Oil Spill Prevention and Licensing Bill 2025 was approved by a majority voice vote late on May 16, following heated debates between government and opposition MPs. The legislation mandates that “responsible parties” in the oil industry provide financial assurances to cover all potential oil spill clean-up and compensation costs, effectively imposing an unlimited liability regime. Companies will be required to establish insurance or other security commensurate with worst-case spill projections, undergo regular safety audits, and immediately address any operational deficiencies or face stiff penalties. Notably, firms that fail to comply can have their exploration or production licences suspended or revoked – a powerful enforcement tool that regulators intend to wield if necessary.
During the parliamentary debate, Natural Resources Minister Vickram Bharrat argued the bill is “about holding operators accountable and protecting our people and environment in perpetuity.” He cited lessons from oil spills globally and emphasized that Guyana, as a new producer, must adopt global best practices to avoid disasters. Opposition MPs acknowledged the need for strong spill safeguards but raised concerns about implementation. Shadow Oil Minister David Patterson questioned whether local agencies have the capacity to enforce stringent inspections, and he urged the government to invest some oil revenues in bolstering regulatory oversight. In the end, the opposition did not oppose the bill’s passage – a rare moment of cross-party agreement on petroleum policy – though they signaled intent to monitor how the law is put into practice.
The new law has been welcomed by civil society and environmental groups, which had campaigned for clearer spill liability provisions. Previously, Guyana relied on contract terms and general environmental laws that critics said were insufficient for the scale of offshore operations now underway. The ExxonMobil-led consortium currently producing oil was already contractually obligated to cover spill costs, but this legislation enshrines that obligation in national law and extends it to all operators and subcontractors in Guyana’s waters. “It’s a cornerstone for environmental accountability in the oil sector,” declared EPA Director Kemraj Parsram, referencing the bill’s comprehensive definitions of damage and requirements for emergency response plans. Importantly, the law aligns closely with international norms like the U.S. Oil Pollution Act, giving confidence to observers that Guyana is serious about responsible oil development.
One contentious aspect had been whether to set a hard financial cap on liability. The passed version pointedly does not cap liability, meaning an operator could theoretically be on the hook for unlimited damages – a provision the government insisted on to ensure companies never find it cheaper to cut corners. Oil companies have publicly voiced support for environmental responsibility while privately worrying about insurance availability for unlimited liability. Industry analysts note that major operators typically carry high insurance coverage regardless, and that Exxon and partners had already provided a parent company guarantee for at least US$2 billion for spills, with pledges to increase that if needed. Under the new law, regulators can demand proof of whatever coverage they deem adequate.
The passage of this bill, and its expected signing into law by President Irfaan Ali, is seen as part of a broader strengthening of Guyana’s petroleum governance. In recent months, the government has updated safety regulations and drafted a model production agreement to secure higher royalties and safeguards in future oil blocks. Opposition members remain skeptical of the government’s commitment to enforcement – pointing out delays in auditing oil expenses and perceived cozy relations with operators – but they also recognize that the legislative framework is improving. As Guyana prepares to auction new oil blocks and production climbs, the true test of the Oil Spill Bill will be in its application. Both government and opposition have a shared interest in avoiding an environmental catastrophe. With this law in place, Parliament has given regulators and the public a powerful tool to hold oil companies to account, marking a new era of vigilance in Guyana’s management of its natural resources.
Region: Demerara-Mahaica (Region 4)
Sources: reuters.comreuters.com
