Guyana looking for new companies to market light sweet crude

…Payara production included ahead of year-end start up

The Guyana Government is inviting companies to market its share of crude oil from the Stabroek Block, where United States oil major ExxonMobil is producing oil from two floating, production, storage and offloading (FPSO) vessels, and is gearing up to start production at its third project offshore later this year.
The invitation for bids issued by the Natural Resources Ministry invites eligible bidders to submit their bids for the provision of marketing services for Guyana’s entitlement of oil from offshore production activities. Interested companies will be bidding to market crude from the Liza Destiny floating, production, storage and offloading vessel and the Liza Unity FPSO vessel in the Liza field, as well as from the Prosperity FPSO vessel in the Payara Project, which is scheduled to come onstream by year-end.
According to the bid invite, they will have to competitively market and maximise 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.
These bids will be conducted on a lot basis, hence bidders can bid for one or more lots, as defined in the bidding documents. Additional information can be obtained from the Permanent Secretary of the Natural Resources Ministry.
The deadline for submission of bids is 09:00h on October 17, 2023, when the bids would be opened at the National Procurement and Tender Administration Board (NPTAB). Bids must be valid for 120 days from the date of bid opening.
Last October, United Kingdom’s BP Oil International Limited won the one-year contract to market Guyana’s share of profit oil from the Liza Destiny and Liza Unity FPSOs. The new contractor would now have to market the country’s crude from three FPSOs.
Prior to BP Oil, Saudi Aramco was contracted in September 2021 to market Guyana’s share of profit oil from the ExxonMobil-led operations offshore.
Guyana started producing oil in December 2019, and its crude lift was initially marketed by Shell Western, after which Hess International marketed the following oil share.
Currently, Exxon and its co-venturers Hess and CNOOC are producing as much as 400,000 bpd with the two FPSOs in the Liza field. The Payara will add another 220,000 bpd when production is regulated in a few months after start-up.
For 2023, Guyana is entitled to 17 lifts.
Earlier this month, the Guyana Government released the Mid-Year Report of 2023, in which it was reported that there were eight lifts of profit oil from the two producing FPSOs during the first half of this year.
Between January and June 2023, Government earned US$705.2 million as revenue from its share of profit oil from two lifts that occurred in the final quarter of 2022, and seven of the eight lifts that occurred in the first six months of this year. Government also earned US$110.8 million in royalties from 2022’s last quarter and from production and sales in the first three months of this year.
According to the report, in July, US$73.8 million was received as a profit oil payment for the Government lift done in June. The cumulative balance, inclusive of interest income of US$35.6 million, at the end of June was US$1,723.5 million, after withdrawals of US$200 million each in the months of February and May.
It was noted, however, with the price of crude oil declining amid demand-side concerns and financial market disruptions that threaten a global slowdown in economic activity, the forecast for NRF deposits has been marginally downgraded. Petroleum deposits for the year are now projected to total US$1,629.3 million, compared with US$1,631.7 million estimated at the beginning of the year.
Consequently, the Guyana Government is now projected to earn some US$1,410 million from the sale of Guyana’s share of profit oil, and US$219.3 million in royalties. It is anticipated that at the end of the year, the NRF closing balance will stand at approximately US$2 billion.
So far this year, Government has withdrawn, in four tranches, some $124.8 billion (US$600 million) from the NRF, which is being held in an account at the New York Federal Reserve Bank in the United States. In the second half of the year, it is anticipated that another $125.2 billion will be withdrawn from the NRF.