BP Int’l selected to market Guyana’s share of profit oil for 1 year

Following a competitive procurement process, the Guyana Government has selected the United Kingdom’s BP International Limited to market the country’s share of petroleum from the two floating production storage and offloading (FPSO) vessels producing oil offshore.
According to the Natural Resources Ministry, 14 companies responded to its Request for Bids that was published on September 16 ahead of the October 11 submission deadline.
Of the 14 bids submitted to the National Procurement and Tender Administration Board (NPTAB), an Evaluation Committee set up by the Board recommended in its report that BP International be awarded the marketing contract. That report was cleared by NPTAB and subsequently received Cabinet’s ‘no objection’.
The duration of this contract with BP will be for 12 months.
Among the services required of BP include providing 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; supporting the Government in the continued introduction of the grade to multiply geographies and refinery systems, and providing benchmark and performance comparisons of prices paid for Guyana’s crude; and working 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 Natural Resources Ministry said.
Previously, Saudi Aramco was contracted in September 2021 to market Guyana’s share of profit oil from ExxonMobil-led operations in the Stabroek Block over the past year.
The State-owned Saudi Arabian company, whose contract has now ended, was the lowest responsive bidder of the shortlisted companies.
Guyana’s crude lift share was initially marketed by Shell Western, after which Hess International marketed Guyana’s crude.
Guyana, with US oil giant ExxonMobil as the operator, began producing oil on December 20, 2019, in the Stabroek Block. Guyana’s oil revenues are being held in the Natural Resource Fund (NRF) at the New York Federal Reserve Bank, where it is earning interest.
With the Liza Destiny and Liza Unity FPSO vessels operating offshore, Guyana is entitled to 13 of 94 lifts from the oil-rich Stabroek Block this year.
Only last month, the Bank of Guyana (BoG) in its third-quarter report for 2022 (July to September) revealed that Guyana earned a total of $102.8 billion (US$493.1 million) thus far this year. This includes profit oil of $92.1 billion (US$442.1 million) and royalties of $10.6 billion (US$51 million).
The Bank attributed this increase to the additional FPSO vessel, Liza Unity, that came into operation in February this year.
It was explained that since oil production began in 2019, there have been 16 lifts of profit oil which have brought in $269.3 billion (US$1.2 billion) in profit oil revenue and $31.9 billion (US$153.1 million) in royalty payments.
“Over the quarter the Federal Reserve increased its target range for the federal funds rate twice moving it from 1.5 per cent – 1.75 per cent to 2.25 per cent – 2.5 per cent and then again to 3 per cent – 3.25 per cent… As a result of these increases which caused interest rates on overnight deposits to rise significantly, and a higher account balance, the fund continued to earn a higher level of interest income on its overnight deposits than previous quarters,” the Bank further explained.
According to the report, the NRF earned $995.7 million (US$4.7 million) in interest income over the quarter, compared to the $266 million (US$1.2 million) it had earned in the previous quarter.
Already, some $83.3 billion or US$400 million has been withdrawn from the NRF and transferred into the Consolidated Fund to fund major capital projects in Budget 2022.
The oil rich Stabroek Block, which is producing the oil, is 6.6 million acres (26,800 square kilometres). Exxon, through its local subsidiary EEPGL, is the operator and holds 45 per cent interest in the Block. Hess Guyana Exploration Ltd holds 30 per cent interest, and CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of CNOOC Limited, holds the remaining 25 per cent interest.
ExxonMobil said it anticipates at least six projects offshore Guyana will be online by 2027. (G8)