Even though there are speculations of possible corruption afoot, the Department of Energy is maintaining that its decision to invite a select group of companies to bid for Guyana’s oil, starting tomorrow, is the best decision for the Nation.
In a statement to the press, the Department contended that its decision was taken following consultations with International experts and specialists along with the Public Procurement Commission. It further stressed that there was nothing unusual about its approach as was indicated in a Bloomberg article published last Friday.
In that news item, Bloomberg revealed that Guyana is expected to receive bids for its oil from at least half a dozen traders from Houston, Geneva and London. It was also revealed that letters were sent to refiners around the globe inviting them to bid “face-to-face” for three million barrels of light-sweet oil. But Bloomberg said that this was not the only unusual aspect of Guyana’s approach. It further stated that the buyer of Guyana’s sweet crude must take the “unusual role” of handling “all operating and back office responsibilities” related to exporting the crude.
Despite Bloomberg’s contentions, the Energy Department is adamant that its arrangement is in Guyana’s interest.
The Department noted that the direct sale to a selected group of companies is being done in two stages.
In the first phase, the Department said that the companies will provide proposals for purchase and the best one will be chosen. In the second phase which gets underway next year, the Department said a public request for proposals (RFP), for marketing services for Guyana’s crude would be issued. This could take about three months to finalize.
The Department further stated that when one considers the fact that Guyana can take its lift as early as February 2020, the need for an introductory phase of the oil is needed. It was keen to note that the quality of the oil is still being tested and in the interim, engaging these selected traders and refiners would be more advantageous to Guyana at this time.
It also contended that the introduction of the crude to the selected group would prevent the Liza Crude from being priced downwards in the future due to uncertainty of the quality.
The Department assured that at every negotiation, a special team of experts and advisors would be present to represent Guyana’s interests. The names of these persons were not provided in the Department’s over 800-word statement to the press.
