DoE defends short term arrangements for sale of crude

DPI, Guyana, Monday, December 16, 2019

The Department of Energy (DoE) has defended its decision to use short-term arrangements for the direct sale of the first three lifts of Guyana’s portion of first oil from the Liza 1 programme.

Director of Energy, Dr. Mark Bynoe told the media that it was “after careful consideration and advice from its experts and the public procurement commission” the department sought to pursue a two-phase approach aimed at marketing Guyana’s crude entitlement.

The short-term first phase begins this week with a focus on setting “national benchmarks” for selling the country’s share of its crude in the future. Selected companies were invited to bid on a short term basis.

Crude Marketing Specialist, Virginia Markouizue explained that these companies could help standardise Guyana’s crude. According to her, they could introduce Guyana’s grade into the market.

“We are trying to create an environment whereby there is standardisation and stabilisation, not only in the quality of the grade, because at the beginning, there are sediments and elements within the produced crude that does not stabilise the quality as such, and the operational considerations as well in terms of the production rates,” Markouizue said.

When questioned about the procurement process for the sale of Guyana’s first crude, Dr. Bynoe noted that it was a sale and not the procurement of a good or service.

“It doesn’t require going through a procurement process,” he remarked.

However, the director added that the second phase of the process involves the Public Request for Proposals (RFP). That process is for marketing services and is currently in the final stages of preparation.

Markouizue further explained that Guyana could not seek RFPs at this stage since it first had to determine the true quality of the crude.  The RFP would be issued for one-year contracts.

“We want to run it through systems who will give us the feedback of what is the fair market value at this point so the RFP would have been too premature and most probably would not allow us this introduction of the grade as such and that’s what we are trying to achieve here,” Markouizue said.