The government is currently in negotiations with the top three firms that have submitted bids to handle the marketing of Guyana’s crude oil from the Liza Destiny and Liza Unity Floating Production Storage and Offloading (FPSO) vessels, in addition to the upcoming Prosperity FPSO set to begin operations later this year.
During his weekly press conference held today, Vice President Bharrat Jagdeo announced that the government initially received 25 bids but are now engaged in discussions with the top three contenders and the contract will soon be awarded.
In September 2023, the government issued its invite for bids, noting that the primary objective of the endeavour was to foster competition and maximize the value of the Government’s crude oil entitlement from developments within the Stabroek Block being operated by United States (US) oil giant, ExxonMobil. Additionally, the initiative aims to establish a competitive market for the Liza, Unity Gold, and Payara Gold Blends, solidifying Guyana’s position in the global oil market.
Last year, in a competitive bidding process, BP Oil International Limited emerged victorious, securing a coveted one-year contract for the marketing of crude oil. This significant development marked the transition from Aramco Trading Limited, a subsidiary of Saudi Aramco, to BP, with the handover occurring on October 31, 2022.
Nevertheless, in this new arrangement, Guyana will no longer be obligated to pay a market commission. Instead, the country will receive a premium for its oil sales.
Vice President Jagdeo emphasized the critical factors of credibility and pricing. He expressed satisfaction with this development, emphasizing the transition from the earlier period under APNU when they had to pay a marketing commission. Now, not only is that commission reduced to zero, but they will also receive a premium above the daily Brent average from the successful bidders.
He also asserted that further details about the specifics of the market and sale of Guyana’s crude oil will be disclosed in the near future.
Currently, crude oil production is in full swing at the Liza 1 and 2 projects, jointly yielding an impressive 400,000 barrels per day (bpd). Anticipation is building as the production of the Payara blend is set to kick off in the third quarter of 2023.
It has already been noted that Guyana, a rising star in the global energy landscape, is poised for substantial growth and projections indicate that the country’s output will surge beyond the 600,000 bpd mark, expected to become a reality as early as 2024.