Guyana expects US$120M from sale of oil this week


By Vishani Ragobeer

The Government of Guyana is expecting its second lift of one million barrels of oil from the Liza Unity vessel and with global oil prices still high, the country could get about US$120 million (or GY $25 billion) when the oil is sold.

Natural Resources Minister Vickram Bharrat said recently that the second set of oil the government is entitled to from the Liza Unity oil ship was expected sometime in Mid-June.

The Liza Unity is the second floating production storage and offloading vessel operating in the Liza Phase 2 development in the Stabroek Block, offshore Guyana.

The ministry’s Senior Petroleum Coordinator Bobby Gossai Jr. told the News Room on Tuesday that the lift is expected between June 16 to 17.

Since Guyana sells its crude at a competitive price, Gossai Jr. noted that the country is expected to sell its oil for about US $120 per barrel. Altogether, that would allow the country to accumulate about the US $120 million.

Senior Petroleum Coordinator Bobby Gossai Jr

The sum accumulated will add to the GY $154 billion already saved in the Natural Resource Fund (NRF). That amount was garnered from previous oil sales and royalty payments as part of Guyana’s oil contract with Esso Exploration and Production Guyana Limited (EEPGL), ExxonMobil’s local affiliate.

Importantly though, Gossai Jr. also explained that the government is engaging in a competitive spot pricing arrangement. This, essentially, means that the commodity (in this case, the barrels of oil) is sold immediately at the current market price.

By doing this, the government is marketing the oil itself. This contrasts the marketing mechanism used for the sale of oil from the first oil ship, the Liza Destiny.

Guyana’s oil from the Liza Destiny is being marketed through Aramco Trading Limited after the local authorities granted a 12-month contract for marketing the government’s share of oil to the company. That contract will expire later this year.

Gossai Jr. explained that the government’s decision to market the oil itself is part of a focus on determining the “most beneficial” arrangement for Guyana.

Guyana’s oil profits have varied over the past few years with the frequently changing cost of oil. In recent months, however, the price of oil has skyrocketed. The Ukraine/ Russia crisis and an ensuing ban on Russian oil are factors contributing to higher prices.

On Tuesday, Reuters reported that a tight global supply of oil outweighed worries that fuel demand would be hit by a possible recession and fresh COVID-19 curbs in China.

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