Guyana: New Gov’t Plans to Relaunch Oil Marketing Tender

August 18, 2020

Exxon is producing oil in Guyana via the Liza Destiny FPSO (Photo: Hess)

Exxon is producing oil in Guyana via the Liza Destiny FPSO (Photo: Hess)

Guyana’s new administration has put a hold on reviewing bids for a contract to lift the government’s portion of crude produced offshore and plans to relaunch the tender, Vice President Bharrat Jagdeo said on Friday.

The South American country began producing crude offshore in December and in June approved a group of 19 companies to move to the next phase of a competitive process aimed at selecting an agent for marketing the share allocated to the government in its contract with operator Exxon Mobil Corp.

But Jagdeo, himself a former president who is now President Irfaan Ali’s No. 2, said companies should not have participated in the tender given a dispute over the legitimacy of former President David Granger’s government.

“We have put a hold on the evaluation of the bids that came in,” Jagdeo, who alongside Ali took office earlier this month, said in a news conference. “We made it clear in the campaign that people should not be submitting bids to an illegal government.”

Jagdeo’s then-opposition People’s Progressive Party (PPP) argued that Granger’s government had been illegitimate throughout 2019 after losing a no-confidence vote in parliament in late 2018. Granger’s allies, after challenging the no-confidence vote in the courts, said it was organizing new elections as quickly as possible.

Ali took office on Aug. 2, five months after a disputed March 2 election that went to a recount.

Guyana, which has no history of crude production, is now one of the world’s newest oil hotspots after Exxon and its partners Hess Corp and CNOOC Ltd discovered more than 8 billion barrels of recoverable resources.

Shell has been lifting the government’s oil so far this year under a short-term contract. The tender launched by Granger’s government would have been for five lifts of 1 million barrels each. 

(Reporting by Luc Cohen in New York Editing by Paul Simao)