Local insurers are now positioned to play a direct role in Guyana’s offshore petroleum sector, following new Environmental Protection Agency (EPA) rules that require oil spill coverage to be secured through insurance companies holding Local Content Certificates (LCC).
The provision is now built into every permit issued for oil and gas activities. Executive Director of the EPA, Kemraj Parsram, recently outlined the strengthened framework, noting that the change reflects ongoing reforms of the agency’s permitting system.
He said the updated requirements ensure that Guyanese insurers—previously unable to participate due to legislative limitations—can now offer coverage alongside, or in combination with, international firms, provided full liability thresholds are met.
According to Parsram, the adjustment aligns with the Bank of Guyana’s financial assurance laws and represents a “meaningful win” for local content. While the scale of liability remains unchanged, local insurers can now capture a share of the financial services being generated by the fast-expanding offshore sector.
“The principle is that local capacity must be included, but without diluting the level of protection the country requires,” he noted.
Beyond insurance, developers must now meet broader financial assurance benchmarks, including parent company guarantees and compliance with the recently enacted Oil Pollution Prevention Responsibility Act. The law sets out strict prevention, preparedness, and response standards, making it clear that operators—not the state—bear the full cost of spill management, cleanup, and recovery.
Parsram stressed that prevention remains the cornerstone of the EPA’s approach. Before any well is drilled, ExxonMobil Guyana and other developers must submit detailed safety reports for technical review by the EPA, the Guyana Geology and Mines Commission, and the Ministry of Natural Resources. Approval is granted only after regulators are satisfied that engineering and operational safeguards, such as blowout preventers and an on-site capping stack, are sufficient.
Permits also mandate regular testing of emergency systems. Operators must activate their oil spill response plans twice within every three-year period, demonstrating the readiness of personnel, equipment, and coordination networks.
Parsram said these drills ensure that teams can respond quickly to any tier-three event and fully understand their responsibilities. By embedding these stringent requirements, the EPA aims to strengthen oversight while ensuring that Guyana’s growing energy industry supports local participation at every level.
