With Saudi Aramco coming out ahead of 14 other companies that had bid for the contract to market Guyana’s fourth oil lift for the year, the Natural Resources Ministry has said that the State-owned Saudi Arabian company was the lowest responsive bidder.
On Saturday the Ministry confirmed that Saudi Aramco, also known as Aramco Trading Limited (ATL), was awarded the contract and assured that a transparent public procurement process was followed.
According to the Ministry, ATL was evaluated and approved to market Guyana’s fourth lift for 2021, which is scheduled for September 21-22, 2021. The Ministry also included a statement from Natural Resources Minister Vickram Bharrat, who it said pledged to ensure the highest levels of transparency in the Ministry.
“The evaluation process included administrative, technical, and financial assessments, which saw submissions from 15 firms. ATL was identified as the lowest compliant evaluated bidder at the price of $0.025 USD per barrel,” the Ministry said.
Government’s commitment to securing the best agreements for the country was noted, and it further pledged to the maintenance of the highest level of compliance and transparency to ensure that the benefits from this sector improve the lives of all Guyanese.
In July it was announced that Guyana was on the hunt for a new crude marketer, with a new Invitation for Bids (IFBs) being issued for companies who will vie for the chance to market the oil currently being produced offshore Guyana by oil giant ExxonMobil and stored in the Liza Destiny Floating Production Storage and Offloading (FPSO) vessel.
According to the IFBs issued by the Natural Resources Ministry, interested firms were invited to submit their bids by August 3, 2021, to the National Procurement and Tender Administration Board (NPTAB).
“The objective of the assignment is to competently maximise the value of the Government’s crude oil entitlement from Liza Destiny FPSO in the Stabroek Block and create a competitive market for the Liza blend,” the IFBs said.
Guyana’s crude lift-share was initially marketed by Shell Western, after which Hess International marketed Guyana’s crude. Of the 15 companies that bid during this latest procurement round, Chinese company Sinochem submitted the lowest bid price at US$0.02 per barrel, while the highest price came from the National Gas Company of Trinidad and Tobago, at US$0.26.
Guyana, with US oil giant ExxonMobil as the operator, began producing oil on December 20, 2019, in the Stabroek Block. Guyana’s oil revenues are being banked in the New York Federal Reserve Bank, where it is earning interest.
In March 2021, the Natural Resources Ministry had disclosed that to date, a total of 5,009,797 barrels of oil worth US$246.5 million have been lifted. This sum, added to the royalties the country receives, took the total in the NRF account to US$267.6 million. And if one considers earnings from the sixth lift in April and royalty payments, this amount is expected to have climbed to over US$300 million.
Guyana received its first payment of US$54.9 million for an oil lift dated February 19, 2020. The second lift on May 21, 2020, was valued at US$35 million; while the third lift, which occurred on August 9, 2020, was worth US$46 million.
The fourth lift of oil offshore Guyana occurred on December 9, 2020, and came in at US$49.4 million in value. And on February 5, 2021, some 997,420 barrels of oil were lifted from Liza Destiny. A sum of US$61 million was paid for that lift.
Already, ExxonMobil has established an ambitious oil exploration plan for 2021 offshore Guyana. Over the past few months, Exxon has been drilling simultaneous deep-water wells in both the Stabroek and Canje Blocks.
In March 2021, ExxonMobil secured a sixth drillship, the Noble Sam Croft, for exploration and evaluation drilling activities offshore Guyana. A fourth project, Yellowtail, has been identified within the block with an anticipated start-up in late 2025 pending Government approvals and project sanctioning.
This project will develop the Yellowtail and Redtail fields, which are located about 19 miles (30 kilometres) southeast of the Liza developments. With the Liza Phase 2 and Payara developments on track for their scheduled completion and the Liza Phase 1 development averaging 120,000 bpd, Guyana’s oil production is likely to exceed 500,000 bpd by 2024.