By Jarryl Bryan
For the first time in Guyana’s short oil production history, there could be as many as two oil lifts in one month, with lifts from the Liza Destiny and Liza Unity Floating Production Storage and Offloading (FPSO) vessels potentially crossing paths next month.
This was revealed by Natural Resources Minister Vickram Bharrat in an exclusive interview with Guyana Times. He explained that Liza Destiny is already scheduled to lift its 1 million barrels of oil in April – its second lift for the year.
“Destiny’s second oil lift for 2022 is due in April. We have an existing contract with Aramco Trading. That’s a 12-month contract. So they’re still contracted with us to market the Liza Destiny crude,” Bharrat explained.
In addition, Liza Unity FPSO, which started producing oil in the Liza Phase 2 development in February of this year, could potentially mark its first oil lift next month. Bharrat said that this seems to be the case from all indications.
“Liza Unity, on start up, you will not be operating at full capacity. So, we’re hoping that the first lift from Unity will be sometime later in April, or early May. We’re hoping that we can get a lift. There are indications that there will be a lift in late April.”
“So that will be good news for us. And of course, as the year goes on, there will be more frequent lifts, because the capacity of the Unity FPSO is 220,000 barrels per day. And we’re hoping that before the year is out, they can reach full capacity.”
According to Bharrat, they got approximately US$95 million for the last lift. And with Brent crude prices currently averaging US$120 per barrel, he noted that Guyana could expect to make over US$100 million for each lift, should both lifts from the Liza Destiny and Unity be completed in April.
The historically high oil prices (oil prices have not exceeded US$100 on the global market since 2014), are part of the fallout from Russia’s invasion of Ukraine. It is, however, a double-edged sword where Guyana is concerned. That is because of the sharp rise in oil prices at the local pumps.
“If both lifts are made in April, we get over US$100 million for each lift. On the other end of that, it means that gas prices will still be high at the fuel pumps and fuel stations. So, it’s a kind of a bittersweet situation.”
“I would prefer a balance. That we get a reasonable amount for our lifts and the prices at the pump to go down too, so that people don’t have to be faced with the high prices we’re currently faced with,” Bharrat said.
Last week, in a move aimed at combating increasing global prices for oil and the impact those increases have been having on the local economy, as well as rising cost of living, the Guyana Government announced the excise tax on fuel importation would be reduced to zero. In announcing the measure, hope had been expressed that this benefit would be passed on to consumers as soon as possible.
The People’s Progressive Party/Civic (PPP/C) Government had previously reduced the excise tax on fuel three times within the past year, from 35 per cent to 10 per cent before completely removing it on Wednesday last.
The previous week, two other major Private Sector bodies – the Georgetown Chamber of Commerce and Industry (GCCI) and the Private Sector Commission (PSC) – had called for the removal of the excise tax altogether as a means of helping the population navigate these challenging times.
In the wake of the Russian invasion of Ukraine, prices of a wide range of commodities have significantly increased. Flour has not been spared, with the National Milling Company of Guyana Inc (NAMILCO) previously announcing a hike of 15 per cent on the price of flour with immediate effect.