Surging oil prices: Guyana could get US $120M from next oil lift

… but costly imports may mean more expensive gas prices

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By Vishani Ragobeer

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Guyana’s second oil lift for 2022 – another one million barrels – could earn the country some US $120 million (or GY $25 billion) because of the steep increase in oil prices, Natural Resources Minister Vickram Bharrat said.

This second oil lift for this year is scheduled for April; the country’s first lift this year was in January and Bharrat said that Guyana secured US$95 million (or GY$19.8 billion) from the sale of that one million barrels of oil.

With the first oil lift, oil prices for the Brent crude (the benchmark Guyana uses) were around US $95 per barrel of oil. On Tuesday, however, oil prices rose to more than US $120 per barrel.

With US President Joseph Biden just announcing that the United States has banned Russian oil imports, oil prices are expected to increase even further.

What that means is that Guyana could be paid a much larger sum of money for its share of profit oil next month.

With current oil prices, though, the minister said, “It’s possible that we can get close to US $120 million from the next lift.”

Minister of Natural Resources Vickram Bharrat

Aramco Trading Limited, a unit of the Saudi Arabian oil company, is currently marketing Guyana’s oil through a one-year contract it inked with Guyana’s government in September 2021.

While surging oil prices means more money for Guyana, Bharrat says that there are other precarious considerations.

“It’s kind of a bittersweet situation because as you know, once the oil price remains high, we will get a good price for our crude in April.

“… at the same time, prices at the pump are high too because we have to import petroleum products (such as) gasoline and diesel,” Bharrat told the News Room during a telephone interview on Tuesday.

And the Natural Resources Minister said that the government is concerned about the high cost of gasoline and the increasing costs vehicle owners, for example, will pay at gas stations.

As such, he emphasised that the government will be seeking to cushion the rising costs. Already, President Dr. Irfaan Ali has given assurances to the public that his government is working to finalise a $5 billion sum to cushion the surge in prices, while examining other solutions.

With Russia’s invasion of Ukraine, there have been several economic consequences. Already, Barbadian Prime Minister Mia Mottley cautioned that the crisis would worsen the rising cost of food and other commodities that started with the COVID-19 pandemic.

Guyana’s main power company, the Guyana Power and Light (GPL) Inc., announced on Monday night that Russian invasion of Ukraine and other events taking place in Europe are severely impacting its operations.

“GPL’s landed cost for fuel today is approximately US$140 per barrel and has quadrupled from 2016 when the fuel price was approximately US$30 per barrel,” the company stated in a press release.

With the rising cost of fuel prices badly affecting operations, GPL urged all customers to practice energy conservation.

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