August 25, 2020
The Liza Destiny FPSO started producing oil offshore Guyana in December 2019 – Image Credit: SBM Offshore
Guyana has re-launched a search for a company to market the government’s share of the crude produced at the offshore Liza project, operated by Exxon Mobil Corp, according to a notice published in the South American country’s newspapers.
President Irfaan Ali’s government scrapped a previous, similar process initiated by Ali’s predecessor shortly after taking office in August. The government is seeking a 12-month contract that would involve five crude cargoes of around 1 million barrels each, according to the Sunday notice.
Exxon and its partners in Guyana’s Stabroek block, Hess Corp, and China’s CNOOC Ltd have discovered more than 8 billion barrels of recoverable resource. The consortium began producing crude in December, a development set to transform Guyana’s agriculture- and mining-dependent economy.
Under its deal with Exxon, the government is entitled to a portion of the crude produced by the consortium, but with no domestic refining capacity nor state oil company, the state needs a private company to market its share.
So far, the government has been marketing its crude through a short-term deal with Royal Dutch Shell. This tender is for a longer-term contract.
Former President David Granger’s government short-listed 19 of the more than 30 companies that submitted bids in a search process launched earlier this year, in the midst of a lengthy recount following a disputed March presidential election.
Vice President Bharrat Jagdeo said last week that the new government would scrap the previous process, arguing companies should not have submitted bids to an “illegal” government.
Bids for the re-launched tender are due on Sept. 22, according to the notice.
(Reporting by Luc Cohen in New York; Editing by Chris Reese and Andrea Ricci)