The newly produced Liza crude has 32.1° API gravity and 0.51% sulfur, based on ExxonMobil’s assay library. According IHS Markit Ltd., a London–based global information provider formed in 2016, this means that Guyana has light to medium, sweet crude which is expected to attract the interest of refineries in the US Gulf Coast (USGC), Europe and China.
As freight rates increase, the UK conglomerate was keen to note that West African crudes with an API gravity range of 28-36° have decreased in the US by 60% since 2016. It said that a continued decrease could occur as USGC refineries look towards Guyana’s crude as a closer alternative.
Entering this new territory of oil producer, IHS said Guyana will need to identify the appropriate crude price, which it expects will be discounted by $2 relative to Dated Brent. Additionally, as new projects ramp up such as Liza (Phase 2) and Payara (Phase 3), with an expected combined capacity of 440,000 barrels of oil per day, the UK company said it is important to keep a close watch on the results of the General and Regional elections in March while alluding to the possible implications for projects.
The global data provider said, “It is unknown how those elections will affect the continued success of Guyanese oil, since the opposing party People’s Progressive Party accused President David Granger’s administration of providing generous contract terms to ExxonMobil, and vowed to review past ‘poorly negotiated’ Production Sharing Agreements.”
