Shell Western Supply and Trading Limited will lift its third and final 1 million barrels of Liza Crude next week under the existing contract it has with the government of Guyana which could see the country’s revenue from oil exports and royalty climbing above US$130 million if the price of Brent holds steady just above US$40.
Guyana’s first 1-million-barrel oil cargo was sold at around US$55 per barrel and the second lift at approximately US$35 per barrel. Together with royalty from oil produced and sold in the first quarter of 2020, the total deposited thus far in the Natural Resources Fund account amounts to almost US$95 million. Brent has been trading just above US$40 during the month of July.
Director of Guyana’s Department of Energy (DE), Dr. Mark Bynoe said last week the Department has been putting the necessary arrangements in place such as document instructions, nomination of the vessel, and getting up the requisite paperwork for the country’s third lift.
“We are very pleased with the relationship we’ve had with Shell thus far. I think the Guyanese people can be well pleased that they’ve seen resources being deposited into the natural resource fund and we trust that those will ultimately be utilized for the benefit of all Guyanese,” he said.
The DE said in June it was one step closer to hiring a firm to market Guyana’s share of Liza Crude on a long-term basis.
Shell Western Supply and Trading Limited was hired to lift the country’s first three 1-million-barrel oil cargoes as oil production got underway last December.
DE had said a five-member Evaluation Committee was formed tasked with producing a Shortlist of Companies after a detailed check of each Firm’s Expression of Interest for general and technical data in relation to qualifications and experience in crude lifting.
Nineteen companies, including Shell, were shortlisted and have progressed to the next phase of the procurement process after which a company will be appointed. The new contract with the successful company would be for 12 months.
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.