Firm to market Guyana’s oil expected by October – Natural Resources Minister

Guyana has received US$46 million for its third oil lift, bringing its three-lift contract with Shell Western Supply and Trading Limited to an end. And Natural Resources Minister Vickram Bharrat is confident that a firm to market Guyana’s oil will be found before the next lift.

The US$46 million, which has gone into the Natural Resources Fund (NRF) held in the United States (US) reserves, means that Guyana’s three-lift contract, signed under the former A Partnership for National Unity/Alliance For Change (APNU/AFC) Government with Shell, has come to an end.
It also means that Guyana must find other ways to sell its oil. The Dr Irfaan Ali-led Government has since retendered for a firm to market Guyana’s oil, citing the fact that some firms boycotted the previous tender due to the caretaker status of the former Government.

In an interview with this publication, Natural Resources Minister Vickram Bharrat expressed confidence that the Government would be able to procure a company before the next oil lift, which he said is expected in November.

“By early October, we should be able to finalise that. We’ll have a new company on board. The fourth lift is scheduled for mid-November. And of course, it depends on production,” Bharrat explained, adding that companies have been expressing interest in the 12-month contract.
According to the Minister, the tender should close by September 22. And once the tender closes, he explained, it should take no more than two weeks to evaluate the tenders they received and ultimately determine the most responsive bidder.

Guyana only began producing oil in December last year, lifting its first million barrels of profit oil in February with oil tanker Cap Philippe transporting it from the Liza Destiny Floating Production, Storage and Offloading (FPSO) vessel.
The oil tanker was chartered by Shell Western Supply and Trading Limited, which had secured the bid to buy Guyana’s first three oil lifts, with each cargo being approximately one million barrels of crude.

Days after the lift in February, Guyana’s Energy Department had invited companies to submit Expressions of Interest (EoIs) to be the marketing agent for the country’s crude. At one point in time, it was reported that some 34 companies, including major oil companies and commodity traders, had expressed an interest in snagging the contract. However, these were subsequently shortlisted to 19 companies.
So far, Guyana has received three cargo lift payments and two royalty payments, all deposited in the NRF fund. This brings the total in the fund to around US$150 million. However, this money has remained untouched owing to the protracted political crisis Guyana found itself in after elections.

Against this background, Vice President Bharrat Jagdeo had recently explained that during the tendering process there were companies that opted not to deal with an illegitimate Government and wanted to await the final outcome of the prolonged electoral process. As such, he noted that all the companies should be given a fair chance to bid for the contract as Guyana’s marketing agent for its share of oil.

“It would be unfair to people, the companies that acted decently and did not put in a bid because they recognised the threat to democracy and you had an illegal Government. They may now be excluded from the process because if we’re moving ahead to evaluate the bids that were received in the period when the Government was illegal.”
“So, we’ve made it clear that we will reopen the tender for that contract, so all those companies that didn’t get a chance to bid [previously] can submit their bids…” The Vice President had also explained.