Guyana still in dark on price for crude sold to Shell

It has been over two months since the Energy Department signed an agreement with Shell (Barbados) to sell Guyana’s first three lifts of oil. It has been a week since the first lift was shipped. Despite this, however, Guyana is still in the dark on what price this oil was sold to Shell for.

At his first press conference for the year on February 10, Head of the Energy Department, Dr Mark Bynoe had referred the media to the Extractive Industries Transparency Index (EITI), when asked for the price Guyana agreed with Shell on.
EITI itself was scheduled to have a meeting with the Energy Department subsequent to Dr Bynoe’s press conference, where it was expected that the matter was dealt with and the Department would share the pertinent information.
When this publication made contact with EITI National Coordinator, Dr Rudy Jadoopat on Wednesday, he explained that the Energy Department is cooperating. However, he noted that they were not provided with the price.
“That is what the GYEITI is all about, to inform the public, what is happening in oil and gas…all the information about who is operating where, when they applied for concessions, the process, did they satisfy the criteria, what criteria did they satisfy. How much did they pay, who they paid it to…what is the price, how was the price determined?”
“We didn’t (get the info at that meeting). That is a work in progress. Because the oil is just shipped, they have to get all the documentation. When you sell something internationally, you have to get certain details from the buyer. We’re looking forward to receiving that information,” Jadoopat said, adding that it won’t happen right away. According to him, there is no definitive timeline on the table.
The first lift of a million barrels of oil from the Stabroek block, part of Exxon’s share, took place last month. Guyana’s first share of crude was lifted by the tanker Cap Philippe, which departed with one million barrels of crude.

It was only recently that the Ministry of Finance compiled and released its first report on the Government’s management of the oil sector since first oil started in December, revealing among other things that no revenues were earned by the Government for that month.
Rather, the report states that all petroleum from December will go towards profit oil, of which the Government will be entitled to half. Moreover, the amount will be credited into a special account called an under-over lift account.
Back in December, the Energy 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.