Two United Kingdom companies have won the contract to market Guy-ana’s oil share for the next fiscal year, government announced on Thursday, as daily oil production will also now come from three developments in the offshore Stabroek Block from next year.
Minister of Natural Resources, Vickram Bharrat, told the Stabroek News that UK company, JE Energy, will be the marketers of oil coming from the Liza-1 platform which uses the Liza Destiny FPSO, while BB Energy will market oil from the Liza-2 and Payara platforms which use the Liza Unity and Liza Prosperity FPSOs, respectively.
Neither of the companies will charge government for the marketing and will instead pay, in the case of BB Energy Limited, US 26 cents on every barrel it sells. JE Energy plans to pay some US 70 cents on each barrel of crude it markets.
The Liza Destiny FPSO is currently producing up to 150,000 barrels of oil per day (bpd), up by 30,000 after debottlenecking, a process of optimizing capacity. Its storage capacity is 1.6 million barrels.
As for the Liza Unity FPSO, it is also producing 30,000 more barrels than had been announced as it moved from 220,000 bpd to 250,000 bpd after the same optimizing process. Its storage capacity is some two million barrels.
The Prosperity FPSO is currently being commissioned and will begin production sometime later this month, the Natural Resources Minister explained. Bharrat said that depending on the “startup and testing period,” they will move to full capacity. The FPSO was designed to also produce at 220,000 bpd and the vessel has an overall storage volume of two million barrels.
If all the FPSOs are producing at an optimized 30,000 bpd of their designed capacity, it would mean that in 2024, this country would see daily oil production of 650,000 bpd.
“The Prosperity FPSO joins the Liza Destiny and Liza Unity FPSOs, which are currently producing more than 380,000 barrels per day. Production from the Prosperity vessel is expected to push daily production to some 600,000 barrels a day in 2024,” ExxonMobil had said when the vessel arrived.
Calls for the bids for the contract to market Guyana’s oil share were advertised in September of this year, as the current contract with British oil major, British Petroleum (BP) nears an end.
“The Ministry of Natural Resources (MNR) hereinafter referred to as ‘the Procuring Entity’, invites eligible bidders to submit their bids for execution of the Provision of Marketing Services for the Cooperative Republic of Guyana’s Oil Entitlement from Lot 1 – Liza Destiny FPSO Vessel, Lot 2 – Liza Unity FPSO Vessel and Lot 3 – Payara Prosperity FPSO Vessel,” the Minis-try of Natural Resources had advertised.
“The objective of the Assignment is to competitively market and maximize the value of the Government’s crude oil entitlement from developments in the Stabroek Block and create a competitive market for the Liza, Unity Gold, and Payara Gold Blends,” it added.
Then on October 17th last, at the National Pro-curement and Tender Administration Board, some 25 companies submitted bids.
They were Repsol Trading S.A, BP Oil Inter-national LTD, Equinor ASA, PetroChina Inter-national (America) Inc., Mercuria Energy Trading S.A, Aramco Trading Company, Petraco Oil Company Ltd, Hess International Sales LLC, ExxonMobil, Gunvor S.A, Glencore Energy UK Ltd, CNOOC Trading (Singa-pore PTE Ltd, Chevron Products Company, ADNOC Trading Ltd, TOTSA Trading S.A, Shell Western Supply and Trading Ltd, BB Energy Trading Ltd, JE Energy LTD, UNIPEC America Ltd, Cathay Petroleum International Ltd, and SOCAR Trading S.A.
The bid was conducted on a lot basis and as such bidders could have bid for one or more lots as defined in the bidding documents, but the bids must be valid for 120 days from the date of bid opening.
Last year, BP had been selected, following a competitive procurement pro-cess, to market Guyana’s share of petroleum from the Liza Destiny and Liza Unity floating production storage and offloading (FPSO) vessels. The Payara FPSO is expected to come on stream shortly.
The Ministry of Natural Resources had noted that it had issued its Request for Bids on September 16, 2022, with October 11, 2022, as the submission deadline. Fourteen bids were submitted to the National Procurement and Tender Administration Board (NPTAB).
The contract was for twelve months at a marketing price of US$0.00 per barrel. This procurement process was initiated after the contract with Aramco Trading Limited ended in December of the year before.
The terms of the contract had stated that the company would:
● provide support and guidance to the Government of Guyana in all operating and back-office responsibilities of managing the crude sales and each individual lift whilst facilitating timely and cost-effective crude operations;
● support the government in the continued introduction of the grade to multiple geographies and refinery systems, and provide benchmark and performance comparisons of prices paid for Guyana’s crude;
● work closely with the government to understand the behaviour and yields of the Liza blend and how these can affect pricing differentials.
“The Guyana Government will continue to employ transparent and international best practices in the management of the nation’s petroleum resources so as to attain maximum returns and advance the livelihoods of all citizens,” the Ministry had said.
