Oil storage not an issue for Guyana at this point but all options being considered

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Even though global oil storage space continues to come under immense pressure following depressed demand, the situation is not one that has affected Guyana at this point. Be that as it may, nothing is being left to chance says Energy Department Director, Dr. Mark Bynoe. In fact, the official told members of the media during a press conference on Monday, that all options are being considered.

Dr. Bynoe was keen to remind that Guyana has pre-sold three cargoes of its sweet, light Liza crude to Shell Western Supply and Trading Limited with the first lift executed in February, last. The second lift is expected in May while the third is scheduled for July.

Taking this into consideration, Dr. Bynoe said that the issue of storage from Guyana’s perspective is not one that really arises. But if the situation continues, that is to say the effects of COVID-19 on wiping out demand for oil, then the Energy Department would bring its considered options into play. At the same time, Dr Bynoe said one has to be cognizant of the fact that storage is expensive.

“As we have seen, there are a number of companies that are hiring the VLCCs (Very Large Crude Carriers) to store their fuel given the shortage of space. Those costs are escalating on a daily basis. So, we have to take the totality of costs and benefits into consideration before we arrive at a single position,” the Energy Department Head stated.

Dr. Bynoe also disclosed that questions were even asked about using Trinidad as an option for storage. But the official was quick to point out that this CARICOM member state is using its space to store fuel while adding that based on estimations received, it would not be able to store for more than a month.

While there is currently a gloomy outlook for global storage space, Dr. Bynoe said that there seems to be signs for cautious optimism as demand seems to be creeping up in some opening economies, particularly China.

Even as those positive signs continue to be monitored, along with the impact of shrinking storage space for oil majors, Dr. Bynoe assured that there has been no major difficulty in sourcing lifting vessels for Guyana’s crude.

Dr. Bynoe said that the department will continue to construct different scenarios to determine at what point certain options being considered would have to be rolled out.