– deadline for submission is October 11
The Guyana Government has invited interested companies to market Guyana’s crude entitlement from the Liza Destiny and Unity Floating, Production Storage and Offloading (FPSO) vessels operating offshore, in the oil-rich Stabroek Block, for the next year.
According to the Natural Resources Ministry, an Invitation for Bids (IFB) was issued earlier this week in search of a company or companies to competitively market Guyana’s profit oil.
Interested bidders desirous of obtaining Requests for Proposals (RFP), consistent with the country’s procurement guidelines, are being directed to the Permanent Secretary of the Natural Resources Ministry.
As per the bidding document, marketers will also be responsible for providing all functions of marketing; assessing regional and global demand centres; selecting customers and making appropriate transportation arrangements; providing support and guidance to the client – in this case, the Government of Guyana – in all operating and back-office responsibilities of managing these crude sales and each individual lifting whilst facilitating timely and cost-efficient crude oil operations; and supporting the client in the continued introduction of the grade to multiple geographies and refinery systems and providing benchmark performance comparisons of prices paid for the client’s crude.
In addition, the company will also have to work closely with the client in understanding the behaviour and yields of the Liza blend and how these affect pricing differentials; support the client with market information requests related to the demand, supply, pricing and trade in the oil market and crude oil trading capacity, and buttress the client in understanding and advocating for any operational considerations that may affect the pricing of crude.
Companies that wish to submit bids must have detailed knowledge, a respected marketing presence and a history in the global crude oil market, and other requirements, the Ministry noted.
They must possess at least 10 years of experience in crude oil marketing and trading – within the last 10 years as a company; experience in crude oil trading and marketing volumes by geography over the last five years with verifiable similar services with national oil companies and governments; and crude oil trading and marketing volumes of no less than twenty (20) million barrels within the last year.
Moreover, the crude marketer has to have a duly-certified written statement confirming that the company does not have any director who has been convicted in any country for a criminal offence relating to fraud or any financial impropriety or criminal misrepresentation or falsification of facts relating to any matter or any pending litigation the bidder may or may not have, among other key requirements.
The selected company will have to market Guyana’s crude for 12 months, commencing in the last quarter of 2022.
The deadline for the submission of bids to the National Procurement and Tender Administration Board is 09:00h on Tuesday, October 11, 2022.
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 15 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 Unity FPSO vessels operating offshore, Guyana is entitled to 13 of 94 lifts from the oil-rich Stabroek Block this year.
With oil prices on the global market skyrocketing, it is estimated that Guyana will earn a whopping $1.1 billion from its total share of profit oil in 2022.
According to the Finance Ministry’s Mid-Year Report earlier this month, the country has already earned US$307 million in profit oil revenue during the first half of the year from the five lifts of crude entitlement.
In addition to the US$307 million earned from selling its share of profit oil, the country also received US$37.1 million in royalties in the first half of the year.
“Government anticipates 13 lifts of profit oil for 2022, and subject to the evolution of world market oil prices, now projects US$1.1 billion from the sale of the country’s share of profit oil, and US$147.7 million in royalties,” the mid-year report states.
When it comes to the money in the NRF, the report reveals that the cumulative balance, inclusive of interest income, was US$753.3 million at the end of the first half of 2022.
The Guyana Government has budgeted to utilise a whopping $126.7 billion from the fund this year to accelerate the country’s development. Already, some $83.3 billion or US400 million have been withdrawn from the NRF and transferred into the Consolidated Fund.
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.
