Oil being produced in Guyana will be sold at market price in keeping with the standard practice for marketing crude around the world.
“Crude oil around the globe is sold via the market price, so whatever the market allows – it is a commodity – and is sold on the market. Whatever the price of crude oil is that day, we trade off of the Brent crude oil price and that’s exactly what it will be, either plus or minus what the typical Brent price is,” Deedra Moe, ExxonMobil Guyana Senior Director, Public and Government Affairs, told OilNOW on Wednesday.
Oil production in the South American country could begin in a matter of days at the Liza Phase 1 Development, ahead of the Q1 2020 schedule. Production will be phased, gradually ramping up to around 120,000 bpd at peak.
When production begins, each stakeholder – ExxonMobil (operator), co-venturers Hess and CNOOC as well as the government, will take turns in lifting their share of crude from the Liza Destiny Floating Production Storage and Offloading (FPSO) vessel. Under the Production Sharing Agreement, Guyana is set to receive 2% royalty and 50% of the profit oil.
“Every lifter – ExxonMobil, the government, Hess and CNOOC; the people who will be selling that oil once its offloaded from the Liza Destiny are going to be trying to sell it for the highest price possible, based on that Brent price,” Moe said.
Asked if the company would be playing a role in setting the crude price, as reported in a section of the local media, the official said, “Absolutely not. ExxonMobil has never set the price for crude oil. We always sell everything on the market and that’s how the crude oil market works.”
Brent Crude is a major trading classification of sweet light crude oil that serves as one of the two main benchmark prices for purchases of oil worldwide, the other being West Texas Intermediate.