Guyana’s most recent sale of 1 million barrels of Liza crude to Indian Oil Corporation Ltd. (IOC) is the country’s “sweetest deal to date” since it is poised to bring in as much as US$76M says Natural Resources Minister, Vickram Bharrat. During a recent interview with OilNOW, Mr. Bharrat confirmed that this is the nation’s highest sale to date.
Explaining how the deal was arrived at, he said the government had invited the Stabroek Block partners – ExxonMobil, Hess and CNOOC, along with the IOC to submit their proposals for the country’s seventh oil lift. “Of the four, we would have gotten the best deal from the Indian Oil Company; that is why we decided [on them] and that is how we will continue to function, that is to say, ensuring we get maximum benefits from the oil and gas sector, and this is what we will continue to do,” Mr. Bharrat noted.
Further to this, he said Guyana is likely to get between US$75M to US$76M for the sale, making it the highest payment to date of the seven lifts. “You could recall the last payment was US$62.1M so this is a significant increase. But what is important to note too is that for this last lift we are not paying any marketing fee. You are just selling the oil to the Indian Oil Company, and they are transporting it themselves. So, this is the sweetest deal we have had thus far,” he intimated.
In contrast to what took place with previous sales, Mr. Bharrat said a marketer’s fee was paid. He noted this was the case with Shell and Hess International Sales LLC Corporation.
He said, “…So we have been bargaining to get the best deal since we took office. We have had five lifts so far since we took office. One with Shell, three with Hess and then this last one with the Indian Oil Company and this last one was from the Government of Guyana.”
After several failed attempts at securing a marketer, the government has returned to the market in search of a credible company to sell its crude. The next lift is expected to be in September.
OilNOW had reported that IOC is the first Indian state refiner to buy Liza oil. Private refiner HPCL-Mittal Energy Ltd, a joint venture between state-run Hindustan Petroleum Corp and steel tycoon L.N. Mittal, had bought a million barrels of Liza grade in March.
India, the world’s third biggest oil importer and consumer, ships in more than 80% of its oil needs from overseas and relies heavily on the Middle East. The nation’s gas demand is expected to increase nearly 3-fold from 229 million metric tonnes in 2018 to 607 million metric tonnes in 2040.
Earlier this year, India asked state refiners to expedite the diversification of crude sources after the Organization of Petroleum Exporting Countries (OPEC+) and its allies failed to ease supply curbs, leading to a spike in global oil prices.
OilNOW understands that India continues to be in discussions with the Guyana government to secure a long-term arrangement for the purchase of the Liza crude.
