-Minister Bharrat reveals
GUYANA is currently on the hunt for a company qualified and capable of marketing the government’s share of the light sweet crude being extracted by the ExxonMobil-operated Liza Destiny Floating Production Storage and Offloading vessel (FPSO).
So far, 15 top oil-trading companies from all across the world have submitted their bids to fill the position as Guyana’s next oil marketer, and according to Minister of Natural Resources, Vickram Bharrat, the successful bidder will be named during the course of this week.
An article published by S&P Global Platts indicate that “the London-registered oil trader for China’s Sinochem submitted the lowest bid price of 0.02 cent,” while “the highest big was submitted by the National Gas Company of Trinidad and Tobago and Heritage Petroleum for 0.26 cent.”
As it is, officials are examining the bids, section by section, to ensure there are no hidden costs that “could alter the actual bid price.”
The Ministry of Natural Resources had made it clear that it was looking for companies that not only had sufficient experiences in the marketing of crude oil, but one that has been involved in the oil-trading business for at least a decade.
The successful company is also required to have experience in “crude oil trading and marketing volumes by geography over the last three years with verifiable similar services with national oil companies and governments as well as crude oil trading and marketing volumes of no less than 20 million barrels within the last year,” the article posited. It indicated too that “Hess Corporation, which is a stakeholder in the ExxonMobil-led consortium in the prolific Stabroek Block, has bid to be the oil marketer at a price of 0.07 cents.” It should be noted that it was Hess Corporation that sold Guyana’s fourth lift, 998,629 barrels, in December 2020, which earned the country approximately US$61,090,968 (G$13 billion). Since then, Guyana has had three other oil lifts, recently receiving payments for its seventh, to the tune of US$79,617,561.87 – the largest single oil payment the country has received to date. This was payment for 1,047,820 barrels of oil, which were also extracted from the Liza Destiny. This brought the country’s oil extractions to a grand total of 7,056,262 barrels, and accumulative earnings of US$388,777,840.
The Natural Resources Minister recently informed the 31st Sitting of the National Assembly that this amount, plus royalties, put the total in the Guyana’s Natural Resources Fund (NRF) to US$436 million, which remains untouched.
As he stood to defend the Petroleum (Exploration and Production) Amendment Bill, Minister Bharrat recommitted the intention of the People’s Progressive Party/Civic (PPP/C) government to be transparent in relation to the use and management of the oil funds.
Minister Bharrat further assured the House that he and his colleagues in government “intend to ensure there is strong parliamentary oversight” of the country’s oil revenues, especially as the earnings from the country’s petroleum sector alone could very well surpass US$500 million by the end of the year.
President Dr. Irfaan Ali had pledged the government’s commitment to even strengthening the existing systems that govern the use of Guyana’s oil revenues.
“We committed, during the campaign, that there will be no secrecy in revenues received by the country from our natural resources, especially oil and gas, and we have stuck to that commitment,” President Ali told reporters during a recent press conference.
He said that, in doing so, the government has always ensured that the public was notified of all the monies deposited into the Natural Resources Fund (NRF). The oil earnings, the President related, are also gazetted. Even further, Dr. Ali said that the oil revenues will also be documented online.
“We are moving a step further in creating a balance sheet that persons can examine, online, and be kept abreast of revenues and expenditure,” the Head of State said. He reasoned that the NRF, also a Sovereign Wealth Fund, is critical to safeguarding resources for future generations of Guyanese, President Ali said.
He noted, however, that such coincides with the fact that the country has “immediate needs” that have to be financed. Dr. Ali had affirmed that even if the government decides to dip into the NRF, mechanisms are in place to ensure that any and every withdrawal has to receive the requisite approval from the National Assembly.
“Any projects to be financed from these funds must be approved by the National Assembly,” President Ali stressed.
Added to that, the Head of State had said that efforts were underway to craft a new legislative framework to govern the important Natural Resources Fund. He related that even though the PPP/C Government would have liked for the legislation to have been presented to Parliament before it went into recess, the document was still being finalised.
Dr. Ali had previously indicated that once all goes well, the significant pieces of legislation could possibly be presented to the House by the end of this year.
Currently, even with oil prices on a global rise, Guyana has still been reaping the benefits of a burgeoning petroleum sector. Guyana sold its first one million barrels of crude on February 19, 2020, raking in nearly US$55 million. In its second million-barrel sale, the country received US$35 million, and another US$46 million as proceeds from the sale of its third million-barrel of crude, and US$49.3 million from its fourth oil lift.
Further, it earned in excess of US$60 million from the sale of its sixth oil lift, and received US$13.9 million in royalties during the first quarter of this year.
Nonetheless, the other companies that are competing to become Guyana’s next oil marketer include Shell, Saudi Aramco, Trafigura, Chevron, CNOOC, Petraco Oil, Vitol, Energy, TotalEnergies, Equinor, Lukoil, BB Energy and Mercuria.