By Monica Rojas | Argus Media
Shell Western Supply and Trading will lift Guyana’s first-oil output, three cargoes of the South American country’s new Liza crude.
Price details were not immediately available, but the sale was conducted on a Dated Brent price basis. The first lifting is slated for February and the completion of the three cargoes are expected by mid-2020 when operational issues and production are anticipated to have stabilized.
The Guyanese Energy Department cited competitive pricing as among the reasons for giving the award to Shell. Other reasons included Shell’s global operations and integrated structure, scale of shipping and storage operations, experience introducing new grades to the market, and “willingness to share critical refinery information” with the department.
The direct sale, a process that was only made available to nine international oil companies (IOC) in an attempt to mitigate downside price risk on the new crude stream, brings Guyana closer to initiating the second phase of its two-step crude marketing process, according the energy department.
Interested parties were required to submit written proposals and to have a face-to-face meeting with the energy department.
“This month’s first phase is a direct sale process with the second being an open market Request for Proposals (RFP) in early 2020,” according to the department. “That phase will be for an agent to market Guyana’s crude entitlements from the Liza 1 field on a term basis.”
Liza, with a preliminary 32.1°API and 0.51pc sulphur, began production over the weekend. The field is expected to reach full capacity of 120,000 b/d in the coming months. Once the 120,000 b/d volume is reached, each batch for the four field stakeholders would be about 1mn bl every eight to 10 days.
ExxonMobil operates the 6.6mn acre (26,800km²) Stabroek field with a 45pc stake. US independent Hess holds 30pc, and the remaining 25pc belongs to Chinese state-owned CNOOC unit Nexen.
Bron: Argus Media