Director, Department of Energy, Dr. Mark Bynoe, on Monday, travelled to the Liza Destiny Floating Production Storage and Offloading (FPSO) vessel to witness the transfer of Guyana’s first million-barrel lift of crude onto the oil tanker Cap Philippe, which was chartered by Shell Western Supply and Trading Limited, the Ministry of the Presidency has reported.
In an invited comment, while on the vessel, Dr. Bynoe iterated that this is a significant moment in Guyana’s history and noted that this first lift is part of the country’s profit oil allocation. He emphasised that this does not include the two per cent royalty, which would be paid on gross productions.
“These one million barrels is part of our profit oil allocation. It does not include the two per cent 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 per cent on all oil that is being produced. This gets us away from the perception that all Guyana is getting under the contract is two per cent 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,” the Energy Director said.
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’s (EEPGL) and Ms. Janelle Persaud, Public and Government Affairs Advisor, EEPGL, MotP reported.
