…lifting will start on Monday, price still not announced
With the news that Guyana can expect to lift its first share of oil next week, it has been confirmed by the Energy Department that a Greek oil tanker, Cap Philippe, will be arriving in Guyana today to lift this oil.
This is according to a statement from the department, in which Director of Energy Dr Mark Bynoe is quoted announcing the impending arrival of the Greek-registered tanker. The statement also observes that Guyana is expected to get at least five cargoes this year.
“The vessel will be moored to Guyana’s Floating Production Storage and Offloading (FPSO) vessel, the Liza Destiny, on Sunday, February 16, 2020, and the crude transfer will take place on Monday, February 17 and Tuesday, February 18, 2020.”
According to the statement, Guyana’s first three cargoes have been sold to Royal Dutch Shell Plc. The Department of Energy has also indicated that it will be launching a Request for Proposal (RFP) shortly to recruit a marketing firm on a term basis to assist in selling Guyana’s crude entitlement.
Back in December, the department had announced that Guyana’s first three lifts of one million barrels of oil each will be sold to Shell. Shell was chosen ahead of companies like Exxon, CNNOC, Hess and BP, all of which bid for the oil. But since the oil would be sold on the spot market, there have been questions as to whether Guyana would earn less money for the oil.
This news was immediately criticised by Opposition Leader Bharrat Jagdeo, who has also said that companies participating in this process could be barred from doing business in Guyana should his party be elected next year. In addition, Auditor General Deodat Sharma had said in sections of the media that his department would look into the transaction.
In defending the decision, the Department had said that at the end of the process, Shell had the most competitive yet secure pricing.
The Department had also claimed that Shell’s global trading reach, Latin America interests and willingness to share refinery info were factors in the decision. In addition, they had reported that Shell was ready to support the Energy Department in operating the cargoes.
However, the lift is occurring at a time when the Department of Energy Director, Dr Mark Bynoe, has deferred the question of what price has been agreed on for the oil. In fact, Bynoe referred the media to the GYEITI. However, GYEITI is yet to receive a report on the transaction.
“We haven’t received any information as yet. We have a meeting with the Department of Energy. And they have agreed to collaborate with us and provide the necessary information so that we can prepare the EITI reporting for public disclosure…But as of now, no specific information has been provided to us,” GYEITI National Coordinator, Dr Rudy Jadoopat told this publication on Tuesday.
The EITI is a global standard to promote the open and accountable management of oil, gas, and mineral resources. Under the EITI standard, companies publish what they pay to Governments and Governments publish what they receive in an annual EITI country report.
Meanwhile, Oilprice.com reported that with West Texas Intermediate (WTI) sliding below US$50 , even more downsides should be expected according to S&P Global Platts’ Claudia Carpenter, who wrote that oil prices will probably drop to the “mid-$40s” a barrel in the next couple of weeks because of weak demand, according to Matt Stanley, Director of Starfuels commodities brokerage.
Crude prices have dropped significantly in the past few weeks on concern that the virus outbreak could blunt global crude demand. Front-month Brent settled Friday at US$54.47/b, 16 per cent below its most recent peak on January 20.