Greece-registered crude oil tanker, Cap Philippe, is set to depart Guyana waters with the government’s first 1 million barrels entitlement after arriving at the Stabroek Block last Thursday.
“These one million barrels is part of our profit oil allocation. It does not include the two percent royalty, which would be paid on gross productions. So, even though we are having a million barrels lift in this particular instance, we are also receiving two percent on all oil that is being produced. This gets us away from the perception that all Guyana is getting under the contract is two percent royalty. I am happy to say that Guyana is entitled to approximately five million barrels of oil in 2020 alone, plus the two per cent royalty, plus withholding taxes, plus the direct and indirect benefits through employment creation and other revenue-generated income. So, this is not a contract that we should take lightly, it is not an occasion that we should take lightly,” Dr. Mark Bynoe, Director of the Department of Energy said.
Dr. Bynoe noted that the offloading takes between 20 to 36 hours and the process is expected to be completed tomorrow. He added that the required officials from the Guyana Revenue Authority and the Guyana National Bureau of Standards (GNBS) are on board to ensure the integrity of the investment is protected as well as to ensure and provide, the level of comfort to Guyanese that the requisite systems are in place to protect Guyana’s interests.
“What has also been happening is that the GNBS has been working assiduously to tag specific meters that are critical in terms of measurement. They have also been working with the operators on the FPSO with regards to calibration so that the measurements that we are getting are precise as far as practically possible, and those tags are to protect the integrity of the system. When GNBS make their checks before they leave and when they return, they are able to ascertain that the system is not tampered with and that Guyana is getting its fair share,” he noted.
With regard to pricing, as it was previously announced by the Department of Energy, Shell was nominated as the successful buyer of the Government’s first three cargoes, with each cargo being approximately a million barrels of crude. The selection of the successful bidder was based not only on Shell’s global supply and trading capability but also on a competitive sale with favourable payment terms. The sale of the first three cargoes has been concluded on a Dated Brent price basis, which reflects the tradable, spot market value of crude oil.
The Department of Energy (DE) has also indicated that it will be launching a Request for Proposal (RFP) shortly to recruit a marketing firm, on a term basis, to assist the Department in selling Guyana’s future crude entitlement.
Dr. Bynoe said the contract does deliver for Guyana and Guyanese and the Department is most proud to be part of the process. He said that Guyanese can look forward to even further revenue being generated to take the country along the economic paradigm that we have set ourselves.
“This has been quite a momentous occasion looking at how far Guyana has come from over the past four years and nine months, from conceptualisation to actual fruition, where we begin to see production. Guyana is having her first lift and given the fact that it is our first lift, this is important to us, not only to see this but to bring the level of assurance to Guyanese that it is no more just a concept, it is actually a reality,” the Director said.
Dr. Bynoe was accompanied by Ms. Joanna Simmons, Senior Legal Officer and Ms. Virginia Markouizou, Crude Marketing Specialist, both of the Department of Energy; Mr. Rod Henson, Country Manager of Esso Exploration and Production Guyana Limited (EEPGL) and Ms. Janelle Persaud, Public and Government Affairs Advisor, EEPGL.