– Minister Bharrat says new crude marketing firm by October

(Guyana Chronicle) GUYANA could expect its fourth shipment of crude in November 2020, as the Ministry of Natural Resources is working to secure a suitable firm to market Guyana’s crude by October.

The country secured its third crude lift in August 2020. Though payment for this shipment is yet to be processed, Guyana already has over US$90M in its Natural Resource Fund (NRF) from previous shipments, royalties and interest. Guyana’s first three million-barrel cargoes of crude were contracted to Shell Western Supply and Trading.

Recently, the government decided to retender the Request For Proposal (RFP) for companies to market Guyana’s crude, with the aim of correcting bids made under the then “illegal” APNU+AFC Government. Previously, 34 large oil traders had submitted proposals, and 19 were shortlisted. It is likely that many of these companies or more will re-submit proposals.

“We’re trying to wrap up this process sometime early October; the process of selecting the company, because the next lift will be some time in November, so we need to give the company some time to be ready,” Minister Vickram Bharrat said.

Guyana is entitled to five crude cargoes for this year as part of its profit share with ExxonMobil and its Joint-Venture (JV) partners. This means that with Shell having received its three cargoes, the country can market its crude to another company or location.

This will be in addition to a two per cent royalty on all crude produced at the Liza Phase 1 Development; 12.5 per cent profit oil; withholding taxes; foreign direct investments and benefits from JV initiatives, employment and jobs for service suppliers.

As ExxonMobil liquidates its costs, by 2025, 50 per cent of all Guyana’s oil sold will come to Guyana, rising up to 52 per cent return on every barrel of oil sold.

Director of the Department of Energy (DE), Dr. Mark Bynoe has confirmed to this newspaper that an invoice has not yet been issued for payment for Guyana’s third shipment under Shell. “The period for calculating crude price is still active/[in] process,” Dr. Bynoe said. “Once the price is determined, an invoice will be issued for payments,” he added.

Minister Bharrat also agreed that Guyana will be receiving this payment “shortly”, which will be followed by public disclosure.

Guyana, new to the oil-and-gas sector, sold its first million-barrel of crude on February 19, 2020, raking in nearly US$55M. In its second million-barrel sale, the country received US$35M. Along with the US$4.9M in royalties received from first quarter gross production and interest, Guyana has over US$90M in its NRF.