Energy Dept. seeking reputable firm to market Liza crude, build capacity

The Department of Energy (DE) is inviting Expressions of Interest (EoI) for the provision of marketing services for Guyana’s share of crude from the Liza phase 1 project.

The department in a notice on Wednesday said with the absence of a National Oil Company, it is responsible for selling the oil to International Markets, pursuant to the Petroleum Sharing Agreement dated June 27, 2016.

The successful company will be mandated to successfully market the Government’s Crude Oil Entitlement, with a Minimum Production Rate of five Lifts per annum.

Each lift is 1,000,000 barrels of Liza Blend Crude Oil from the Liza Destiny Floating Production Storage and Offloading (FPSO) vessel.

The firm will be responsible to provide support to department in all operating and back-office responsibilities of managing these crude sales and each individual lift, support the agency in the first year of introduction of the grade in multiple geographies and refinery systems and use all reasonable efforts to provide relevant information, documentation and/or training in a timely manner for DE personnel.

Additionally, the firm will be required to work closely with the DE in understanding the behaviour and yields of the Liza Blend and how these affect pricing differentials and advocating for any operational considerations that may affect the pricing of the crude.

It will also have to conduct training sessions for DE personnel in matters relating to Crude oil Supply and Trading fundamentals, and more specifically, those relevant to the Liza grade pricing.

Expressions must be submitted by 14:00hrs on March 12 to the Chairperson of the National Procurement and Tender Administration Board, Ministry of Finance Compound, Main & Urquhart Streets, Kingston, Georgetown, and the contract will be valid for 12 months.

The Government stipulated that the marketing firm must have experience in Crude Oil marketing and trading for over five years, submit is annual turnover and other documents, and allow the DE to verify all claims made in the submission.

The firm must also not have any Director who has been convicted in any country for a criminal offence relating to fraud or any financial impropriety or criminal misrepresentation or falsification of facts relating to any matter.

Provisions are made for clarifications from the DE but no face-to-face interaction is allowed.

Guyana began producing oil on December 20, 2019, from the Stabroek Block located approximately 120 miles offshore.

The first two lifts went to ExxonMobil and contractors on the Stabroek Block after which Guyana received its first lift on February 18-19.

The Energy Department in January selected Shell Western Supply and Trading Limited of the Royal Dutch Shell group of companies to buy the country’s first three lifts of oil.

The output from the first phase of the Liza project is expected to reach a capacity of up to 120,000 gross barrels of oil per day (bdp), utilizing the Liza Destiny FPSO vessel.

The Stabroek Block is expected to produce up to 750,000 bpd by 2025.

ExxonMobil has made 16 discoveries offshore. The seafloor beneath Guyana’s coastal waters contains one of the largest oil discoveries in recent years, placing Guyana in the top 40 reserve holders in the world.

The Energy Department in its background to the EOI said: “given the novelty of this experience, Guyana’s government has taken steps to prepare for the complexities, opportunities and risks that lie ahead.”