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Tankers lifting Liza Crude required to comply with Guyana’s pandemic measures

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New oil producer Guyana continues to take precautionary measures at offshore installations in response to the global pandemic which has seen tankers lifting the Liza crude being required to arrive well ahead of time for each lift, in keeping with quarantine protocols.

Minister of Natural Resources, Vickram Bharrat, said Tuesday that tankers now have to arrive in Guyana two weeks prior to the date of each lift, in keeping with the country’s quarantine regulations. This, however, is resulting in additional costs being incurred, which is being split with ExxonMobil, operator at the 6.6 million acres Stabroek Block. 

During the consideration of line items for the country’s National Budget, it was indicated that some $210 million has been allocated to the Ministry’s Petroleum Management programme and this sum has been split across demurrage expenses, the costs for a third party inspector for the lifts, and quality and quantity claims and expenses. 

Demurrage refers to the cost payable to the owner of a chartered ship on failure to load or discharge the ship within the time agreed. According to Mr. Bharrat, “The demurrage expenses relate to the waiting time for tankers that is receiving or that is coming to uplift crude from the FPSO; if there is any downtime, especially now with the COVID period, it is required for vessels to be in the water 14 days before the day of the lift.” 

The South American country has mandated that persons be quarantined for 14 days after arrival in the country.

He went on to say, “if for any reason there is a delay in the transfer of crude from the FPSO to that tanker, then they incur a demurrage expense which in the crude lifting agreements signed by the previous administration, the agreement is to share that expense with EEPGL [Esso Exploration and Production Guyana Ltd., – ExxonMobil affiliate].” 

Guyana began producing oil last December at the Liza Phase 1 Development.

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