Guyana to receive US$106M from Liza Unity FPSO’s 1st oil lift
The Guyana Government will be receiving US$106 million for its first oil lift entitlement from the Liza Unity Floating Production Storage and Offloading (FPSO) vessel, a lift that has already been sold via a competitive bidding process to an ExxonMobil affiliate.
The announcement was made by the Natural Resources Ministry on Saturday. They explained that the lift of 1 million barrels of Unity Gold crude, at a rate of US$106 per barrel, is being made between April 23 and April 24. The oil will be loaded onto the vessel MV DIMITRIOS by the terminal operator.
“The first cargo of Guyana’s lifting entitlement was sold to ExxonMobil Sales and Supply LLC following a competitive bidding process by the five companies, inclusive of the covertures of the Stabroek Block.”
It was explained that ExxonMobil LLC had the best bid when it comes to the pricing differential for the crude. Further, the Ministry made clear that there will be no marketing fee for the lift and that further, the lift is a one-off arrangement with the company.
“The GoG will be working to ensure that Guyana receives the best price for each cargo from both the Liza and Unity Gold crudes. The forecasted price for this first lift of the Unity Gold crude for Guyana is US$106 per barrel,” the Ministry further explained.
It was previously revealed by Natural Resources Minister Vickram Bharrat that this month could see as many as two oil lifts being undertaken, with lifts from the Liza Destiny and Liza Unity FPSO vessels potentially crossing paths.
Bharrat had explained in an interview with this publication that Liza Destiny is already scheduled to lift its 1 million barrels of oil in April – its second lift for the year. Meanwhile the Liza Unity FPSO, which started producing oil in the Liza Phase 2 development in February of this year, could mark its first oil lift as well.
According to Bharrat, they got approximately US$95 million for the last lift. And with Brent crude prices averaging US$120 per barrel at the time he spoke, he noted that Guyana could expect to make over US$100 million for each lift, should both lifts from the Liza Destinyand Unity be completed in April.
The historically high oil prices (oil prices have not exceeded US$100 on the global market since 2014), is part of the fallout from Russia’s invasion of Ukraine. It is, however, a double-edged sword where Guyana is concerned. That is because of the sharp rise in oil prices at the local pumps.
Guyana, with US oil giant ExxonMobil as the operator, began producing oil on December 20, 2019, in the Stabroek Block. The first ever payment of US$54.9 million for an oil lift was received in February 2020.
Since Exxon found crude in commercial quantities offshore in 2015, there has been 28 oil finds to date in the Stabroek Block and an estimated recoverable resource of over 10 billion oil-equivalent barrels.
United States oil giant, ExxonMobil is currently undertaking four production projects Liza 1, Liza 2, Payara and Yellowtail in the oil-rich block. Production capacity is currently at 120,000 barrels per day (bpd) with the Liza Destiny FPSO in operation.
Meanwhile production only recently started in the Liza 2 development, which is said to produce even lighter crude than Liza 1. It is also estimated that when the Yellowtail development project comes on stream, production will climb to 810,000 bpd by 2027. The US oil major anticipates at least six FPSOs producing 1 million bpd by 2030.
The oil rich Stabroek Block is 6.6 million acres (26,800 square kilometres). Exxon, through its local affiliate Esso Exploration and Production Guyana Ltd (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. (G3)