Oil futures rose this week pushing both Brent and WTI contracts to around 2 ½ month peaks as new oil producer Guyana lifted its second 1 million barrels of crude from the ExxonMobil-operated Stabroek Block where production began last December at the Liza field.
Brent rose more than 1% on Thursday to its highest since March, supported by lower U.S. crude inventories, OPEC-led supply cuts and recovering demand as governments ease coronavirus restrictions on people’s movements, Reuters said in a report.
Brent, against which Guyana’s Liza crude is traded, hit a 21-year low below $16 a barrel in April as demand collapsed but has since made a comeback and was trading around $35 on Wednesday when the oil tanker Sonangol Namibe began lifting the 1 million barrels of oil from the Liza Destiny FPSO. This represents the second cargo for Guyana as part of its profit oil from production at the Liza Phase 1 Development.
Shell Western Supply and Trading Limited has been contracted to lift the country’s first three cargoes. Following the second lift, Guyana is expected to have 3 more lifts of 1 million barrels of oil each remaining for 2020.
The Department of Energy (DE) said on Thursday applicants who submitted Expressions of Interest for the provision of crude marketing services are being shortlisted. The DE said the preparation of the Shortlist of Firms to be invited to submit full Technical and Financial Proposals will be completed by June 25, 2020. The government had said it is planning on shortlisting no more than 20 companies.
The country had attracted interest from several oil trading companies for a contract to serve as the marketing agent for the government’s share of the country’s crude.
In February, Guyana’s first cargo sold for $55 a barrel, before the worst of the oil price collapse.
Projected lifting costs for Liza partners will be just over $10 per barrel for the full year, according to Ruaraidh Montgomery, director of research at Houston-based consultancy Welligence.