GEORGETOWN | If the Well Blows: Guyana's $65 Billion Insurance Gap and the Exxon Liability Gamble

BP's Deepwater Horizon disaster cost over $65 billion. ExxonMobil's total coverage for a Stabroek Block blowout is $2.6 billion — insured, in part, by a company Exxon owns itself. Guyana is one catastrophe away from finding out who really pays the bill.

Calvin G. Brown | Caribbean Economics | WiredJa

📄 This is the second in a series. Read Part One: Two Cents on the Dollar: How Washington Is Blocking Guyana From Its Own Oil Wealth

GEORGETOWN,  Guyana, April 5, 2026 - In April 2010, a blowout on BP's Deepwater Horizon rig in the Gulf of Mexico killed eleven workers, unleashed 4.9 million barrels of crude into the sea, coated more than 1,000 miles of coastline, and triggered the most expensive environmental liability settlement in corporate history.

By the time the litigation was substantially resolved, BP and its partners had spent more than $65 billion — and the ecological damage to deep ocean ecosystems, scientists warn, will take decades more to fully manifest.

Keep that number in mind as you consider what ExxonMobil has put on the table to cover a comparable disaster in the Stabroek Block, 26,800 square kilometres of deepwater Guyanese territory currently producing oil at some of the world's most prolific rates: $600 million in insurance, backed by a $2 billion parent company guarantee. Combined coverage: $2.6 billion. Against a Deepwater Horizon-scale event, that figure does not even cover the opening act.

The Coverage Gap at a Glance

The Insurer in the Mirror

The $600 million insurance policy covering Stabroek Block operations is not held with a major independent underwriter. It is provided by Ancon Insurance — a company wholly owned by ExxonMobil. Critics including economist Elson Low have flagged the structural absurdity: in the event of a catastrophic spill, Guyana would be filing a claim against an insurance company that is, in legal and financial terms, the same entity that caused the damage. The company on both sides of the ledger is Exxon.

While the 2024–2025 exploration campaign contract was placed with Aon UK Limited, the broader self-insurance arrangement for production operations raises questions that no amount of corporate reassurance has convincingly answered. A court-backed demand for an independent insurance structure has been pending since 2023. It remains unresolved.

The Legal Battle Exxon Won By Stalling

In May 2023, Guyanese High Court Judge Justice Sandil Kissoon issued a landmark ruling: Condition 14 of ExxonMobil's environmental permit imposed unlimited and uncapped liability on the company for all cleanup, restoration, and compensation costs arising from any spill in the Stabroek Block.

He ordered the Environmental Protection Agency to enforce compliance and compel Exxon to provide an unlimited parent company guarantee by June 10, 2023.

Exxon appealed. On June 8, 2023, Appeal Court Judge Justice Rishi Persaud granted a stay of that order — two days before the deadline — effectively suspending Exxon's obligation to comply.

As of the most recent reporting, there is no evidence that ExxonMobil has provided the unlimited guarantee the High Court found it was legally obligated to furnish. The stay of execution has become, in practice, a stay of accountability.

"Exxon's verbal assurances that it would cover 'all costs' of a spill are superseded by the written US$2 billion ceiling. The company on both sides of the insurance ledger is Exxon."

The Cost Recovery Trap

Compounding the liability gap is a provision buried in the 2016 Production Sharing Agreement that has received insufficient public attention. Under the PSA's cost recovery framework, unless Guyana can prove that a spill resulted from Exxon's gross negligence or wilful misconduct, cleanup costs exceeding the insurance coverage can be recovered from Guyana's share of oil production.

In plain terms: if Exxon cannot be proven reckless, Guyana absorbs the bill from its own oil revenues — the same revenues that are already constrained by a 2% royalty rate.

A further risk has emerged as Exxon has ramped production in the Stabroek Block beyond the levels assessed in the original Environmental Impact Assessments. Those EIAs were the basis on which the $2 billion guarantee was calculated.

Reports indicate the Guyanese government is still awaiting a technical determination on whether the production increase constitutes a breach of the guarantee's terms — meaning the coverage floor may itself be compromised by output Exxon was never formally authorised to reach.

What a Better Deal Looks Like

The contrast with Guyana's more recently signed PSA with TotalEnergies is instructive. That agreement, published in November 2025, prohibits self-insurance, names the Government of Guyana as an insured party on the policy, and closes several loopholes present in the Exxon arrangement.

Under the old Exxon structure, only the contractors were named as insured — meaning that in a disaster scenario, Exxon and its partners would be compensated for their damaged assets while Guyana's exposure remained uncovered.

That a subsequent contract was able to include these basic protections demonstrates they were always available to be negotiated. They simply were not negotiated in 2016. That failure — whether born of inexperience, asymmetric legal resources, or pressure to seal a deal quickly — is precisely what the ongoing calls for renegotiation seek to address.

When US Ambassador Nicole Theriot warned last week that renegotiation would send a "terrible signal" to international investors, she did not mention any of this. She did not address the $62 billion gap between Exxon's coverage and the Deepwater Horizon benchmark. She did not mention the self-insurance arrangement, the stayed court order, or the cost recovery clause that routes catastrophic liability back to the Guyanese people.

Perhaps the most dangerous signal of all is the one being sent to Guyana right now: that its citizens should accept a contract that leaves them exposed to a disaster they cannot afford, underwritten by an insurer that works for the company they would be suing.

-30-