ExxonMobil Operations in Guyana Oil Industries
Company overview
ExxonMobil is an oil and gas company located in Irving, Texas, United States. It is classified under multinational companies since it is located in many nations. The company was started on November 30, 1999, by John D. Rockefeller due to a merger between Exxon and Mobil. The CEO of the company is Darren Woods who is an American businessman. The company is one of the most traded energy companies globally as it applies new technology to ensure safety and provide to all growing needs of consumers worldwide. Its global brands include; Esso, XTO energy, Mobil, chemicals, and ExxonMobil. All brands are energy providers of products like lubricants, fuel, and chemicals. The products are mainly marketed via more than 10,000 retail stores. These brands are located in approximately 200 countries on six continents and employ around 71,000 people.
ExxonMobil is known for good governance through its management committee, consisting of high-quality directors, officers, and employees. They are directed by a code of ethics that gives each party order in the countries they operate in. Some of the ethics in ExxonMobil include; integrity, equality, commitment, accuracy, and timely. Every employee is expected to complying with state laws, face disciplinary actions when they have violated the business policies, receive training every four years, be guided by anti-bribery practices, and report any violations.
The policies of ExxonMobil include; protecting the environment in all states of operation, promoting free trade, investing and building, creating employment, and providing energy abundance. Further, for those aiming to work with this company, the career opportunities include; commercial and business, Human resources, Engineering, Geoscience, information and technology, operations, finance, safety, security, health, and environment.
ExxonMobil in Guyana
Guyana is a country found in the north mainland of South America. It borders Venezuela to the west, the Atlantic Ocean in the north, Brazil in the south, and Suriname to the east. Its total space is 215,000 square kilometers making it the fourth smallest country in South America. Its capital city is Georgetown, located in the coastal regions of the country. Its oil exploration started in the 1950s but only got the first production in 2019 courtesy of ExxonMobil.
ExxonMobil began its operation in Guyana in May 2015. It made many discoveries that paved its way to start producing in December 2019. ExxonMobil operations are mainly located in Stabroek, Canje, and Kaieteur Blocks offshore Guyana. In Guyana, the company’s main office is located in Georgetown. Drilling technology is the primary production method for both onshore and offshore production. The ExxonMobil team operations include; production of crude oil, engaging with the community through training and information, doing research on environmental conservation, improving technology to meet their production and conservation, and
Environmental and Social Impacts of ExxonMobil Operations in Guyana
The operations of ExxonMobil in Guyana have had significant impacts on the people and the environment of Guyana. No matter how thorough conservation teams work in oil companies, we will always experience oil and chemical spills in the environment, whether the production is on or offshore. Guyana has had several episodes of oil spills, which they have continually improved towards their goal of eradicating such leakages in the future. For instance, in 2019, they reported 7,500 hydrocarbons spills which had reduced from 11,300 in 2018. Guyana is a rainforest country located below sea level; hence its geology makes it prone to climate change compared to its bordering nations. It’s likely to encounter higher temperatures, rising sea levels, flooding, and hurricanes. The company has had many projects that have ensured safety and health management at all times.
ExxonMobil’s environmental policy is guided by a scientific understanding of the environmental impact on the environment in the course of its operation for the social and economic needs of the Guyana community. They operate under the slogan “Protect Tomorrow. Today”. When the law is not enforced on conservation, the company is keen to follow international laws regarding the same. For instance, through research, ExxonMobil discovered five new species and one new plant. Therefore, through their understanding of the environment, they have contributed to the advancement in Guyana biodiversity. They have also managed wildlife through the various project that they have involved the community.
The company established a wastewater management plant in 2017, which has decreased around 65% of nitrate levels present in drinking water. Additionally, they have established many movements that have encouraged recycling plastics, which are increasingly being used and dumped in the sea. They have also come up with new eco-friendly products and encouraged their use by the residents in a move to eradicate plastics.
Additionally, the boom in the oil industry in Guyana has led to many advantages for its people. Production in the sites contributes to 50% of the workforce being Guyanese. The move has since contributed to High GDP in the country, with many unemployed youths finding jobs in the industry. The company has also taken preventive and conservative measures to protect the environment from harm for the sake of the communities in Guyana. They have also established schools of technology and engineering that have continued to provide training to its employees and other students in that field. It has also been estimated that Guyana will become the leading producer of oil in the future due to its geostrategic position between Mexico and its neighbors. Its geological position will also have negative impacts since it is way below sea level.
However, a case brought to court by the University of Guyana lecturer Troy Thomas and others recently shows that due to Guyana onshore exploitation of oil, there has been increased gas flaring at an offshore well due to recurring problems from gas compression equipment used by ExxonMobil. The company has denied such allegation by saying that “we comply with all applicable laws at every step of the exploration, appraisal, development and production stages; as well as each step of the rigorous process to obtain environmental authorization for our projects in Guyana” (Argus News, 2021). The government has thus fined them a sum of $1.3mn. The residents are more worried about the deep-water operation that ExxonMobil plans to start in Stabroek block, which might be environmentally threatening than their current operations.
Another case reported to court with the case’s lead lawyer Melinda Janki reveals that greenhouse gas emissions from the offshore oil fields on Guyana shores are very high to the extent of damaging the coral reefs and mangrove due to increased acidity levels. Coral reefs are an essential asset in the life of other marine life because they feed on them and get sheltered. The reefs are also food for residents and act as a storm breaker from damaging the coastline. If they are slowly being eradicated, then we are sure to lose other marine life like turtle and fish as well as have Guyana coast destroyed. Mangrove as well is too essential to damage. They provide shelter and food for most marine creatures. Therefore, their presence is very vital. It seems that the increased levels of acidity will also affect other Caribbean countries based on what Janki said “This is critical for our sisters and brothers in the Caribbean because they depend, as does Guyana, very heavily on the oceans for livelihoods (Anastasia Moloney, Thomson Reuters Foundation, 2021).
Human rights violations by ExxonMobil in Guyana
ExxonMobil has a culture that respects human rights in its operation through its practices and stipulated policies. Additionally, the company’s practices reflect what the United Nations require for any company regarding human rights. However, the company has faced a few cases of human rights violation as follows;
• They have been accused of collaborating with the government to obtain a license for onshore oil drilling in Stabroek block. Residents took the matter to court because they believe it is a violation of human rights. They argued that if the company has had several cases of offshore spillage of gas and oil, it would be catastrophic when they drilled in their deep waters (Business and Human Rights Resource Center, 2020). This was viewed as part of their selfish motives and the need to satisfy their interest and government since researchers predicted that the GDP would increase.
• The Guyanese citizens also filed a case on ExxonMobil to stop the production of fossil fuels with claims that they were violating human rights. The residents claimed that it was unconstitutional for the government to allow massive production of oil on theory shores without considering the environmental impacts it would have today and for future generations (Press Room, 2021).
Benefits of a Robust Internal Environmental Culture on ExxonMobil and its Stakeholders
An internal environment in a company refers to a business environment with elements or practices within which can face effect from the choices, decisions, or activities done in the organization. Therefore, having a robust environmental culture means that an organization has decisions and activities within its business that are strong and easily adaptable. That is, such practices are flexible to accommodate all changes with the business. It also assures the employees that their culture is unique and is meant to be favorable for everyone (Halmaghi, Iancu & Băcilă, 2017). Stakeholders, in this case, refers to the investors, employees, customers, and suppliers. For instance, if ExxonMobil had a robust internal culture, then they would experience the following benefits;
• The company will come up with good practices. ExxonMobil’s good practices can include; maintaining health and safety at workplaces, good customer service, good communication, good leadership, and equality in sharing resources. Most of these practices will attract customers to the business (Pollock, Ho & Farid, 2013). For instance, how the gas station attendants respond and talk to their customers determines whether they would consider coming back again or go to another brand. This is because the oil industry is very competitive, and it is only through good practices, ExxonMobil can retain customers.
• Improved productivity and reduced costs. Having a robust culture promotes business performance by ensuring that employees are motivated and energized to work (Pollock, Ho & Farid, 2013). For example, ExxonMobil can commit to a culture that rewards employees regularly or monthly. An example of an oil company that rewards its employees is Shell, a Dutch-based company located in various countries worldwide. Such a culture acts as a propelling force to employees’ performance since a reward is offered at the end of a season. Such a culture needs commitment because if you reward the employees and tomorrow, you fail to, employees will demotivate them, and sales will automatically decrease.
• The company is likely to retain quality employees. A quality employee is qualified through both experience and education. For a company to retain such an employee, it has to have a robust internal culture (Pollock, Ho & Farid, 2013). Where employees’ interests are taken into consideration, their salaries and other benefits paid on time, when it is time to be promoted to a higher position they are considered, and where communication towards employees is defined. In such an environment, the organization will benefit from retaining its quality employees whom they have grown with experience and continued training.
• The company would benefit from a good reputation. There is nothing prestigious like a good company name (Pollock, Ho & Farid, 2013). What is your brand known for? Are you known for your corruption, harassment, inequality, mistreatment of employees, or for being loyal and respectable? Well, having a robust culture would help ExxonMobil retain its brand name more positively. Customers will only be pleased with a company that respects human rights; hence the culture should commit to it. Acknowledging all individuals as being equal, encouraging diversity, and respecting each other’s opinions. Such practices will minimize the many scandals that organizations portray, which ruins their reputation.
• Stakeholders will benefit through quality services and goods. An internal culture with the needs of its customers at heart will consistently produce quality products based on the needs of the consumers. Take, for instance, the lubricant oils that ExxonMobil produces. With a robust internal culture, the products ought to be produced so that it is effective once used on customers’ vehicle. Most companies who lack such a culture always aim at making a profit at the expense of a customer. It is indeed wrong to ignore the only people that propel businesses forward.
• Stakeholders like the community will benefit from a healthy environment promoted by the company. Every community is scared when a company is located within its vicinity due to environmental issues. Especially energy-producing companies tend to be more destructive by emission of greenhouse gases and other harmful substances to the environment. With a company having the community’s needs at heart, they would quickly curb such pollution cases. We are not talking about 100% eradication, but they can minimize the pollution to amounts that have lesser harm to the environment.
• Further, stakeholders like the government will benefit through receiving monthly taxes as demanded by the law. Many companies have sought means of evading taxes which lands them in more debts and trouble when discovered. A company with a robust culture will have integrity essential in settling the government shares each month (Pollock, Ho & Farid, 2013). Therefore, the government will acquire enough revenue essential for running its projects. The move will benefit not only the government but also the company. When a company has no debts, it is easy for them to realize profits. Also, when the authorities discover fishy actions in terms of tax payment, the business can lose its operating license.
Recommendations for ExxonMobil as a Corporate Socially Responsible Company (CSRC).
A corporate socially responsivity is a model in business that helps an organization be socially accountable in terms of its employees, stakeholders, and public. A company that is conscious of the environment, economy, and social well-being of a community and a nation at large. Can an organization be socially responsible? Yes, a company can be responsible socially. Below are the recommended steps that ExxonMobil can take to be a CSRC.
• Be accountable as a company before being accountable to the public. Since charity begins at home, the company should be accountable first. How can they be accountable? By organizing training for their employees regarding social responsibility, disposing of waste properly, installing suitable types of machinery for production, and having clean workspaces.
• Adopt a business code of ethics that includes environmental goals. The company needs to include environmental goals in its code of ethics. For example, integrity should be defined in both the work environment and the external environment. This should be included in all other ethics, which should help protect Guyana’s environment.
• Should show commitment in protecting the environment. Commitment means that no stopping. Once the company commits to protecting the environment, it should put all measures in place at all times. ExxonMobil can include the use of eco-friendly packaging in its lubricant oils. They can also consider coming up with a strategy to acquire the used containers and reuse them to repackage. It is as easy as having a sound collecting system at the garbage site to sort their containers and return them to their factories.
• Should follow safety and health programs in the organization. Safety is critical, especially in oil companies; carelessness can result in a lot of damage to the environment, primarily through fires and poisonous gases. When safety is considered, such cases are easily avoided.
References
Anastasia Moloney, Thomson Reuters Foundation, (2021). Lawsuit Challenges ExxonMobil’s Exploration and Production Activities in Guyana. Offshore Engineering. https://www.oedigital.com/news/488126-lawsuit-challenges-exxonmobil-s-exploration-and-production-activities-in-guyana
Argus News, (2021). Guyana climate activists target ExxonMobil: Update. https://www.argusmedia.com/en/news/2221296-guyana-climate-activists-target-exxonmobil-update
Business and Human Rights Resource Center, (2020). ExxonMobil deal deprives Guyana of up to $55 billion according to Global Witness; Exxon disputes allegation. https://www.business-humanrights.org/en/latest-news/exxonmobil-deal-deprives-guyana-of-up-to-55-billion-according-to-global-witness-exxon-disputes-allegation/
Pollock, J., Ho, S. V., & Farid, S. S. (2013). Fed‐batch and perfusion culture processes: economic, environmental, and operational feasibility under uncertainty. Biotechnology and bioengineering, 110(1), 206-219.
Press Room, (2021). Guyanese Citizens File Climate Case Claiming Massive Offshore Oil Project is Unconstitutional. Center for International Environmental Law. https://www.ciel.org/news/guyana-consitutional-court-case-oil-and-gas/
Halmaghi, E. E., Iancu, D., & Băcilă, M. L. (2017, June). The Organization’s Internal Environment and Its Importance in the Organization’s Development. In International Conference Knowledge-Based Organization (Vol. 23, No. 1, pp. 378-381). Sciendo.
Staff Reporter, (2017) Guyana’s Petroleum Industry: The environmental impact question is absent. Letters. https://guyanachronicle.com/2017/01/30/guyanas-petroleum-industry-the-environmental-impact-question-is-absent/
https://corporate.exxonmobil.com/Sustainability/Sustainability-Report/Environment
https://corporate.exxonmobil.com/Locations/Guyana
https://corporate.exxonmobil.com/About-us/Brands#ExxonMobil
http://nyjobsource.com/exxonmobil.html
