Shell Western Supply and Trading Ltd. to buy Guyana’s first 3 lifts

− Phase 1 of Government’s two-step crude marketing process nearing completion.

DPI Guyana, Tuesday December 24, 2019

 Shell Western Supply and Trading Limited will buy Guyana’s first 3 lifts of crude oil.

The announcement came from the Department of Energy (DE), which also revealed that Phase 1 of its two-step crude marketing process is close to completion.

The agency had previously announced a two-phased approach to lifting and marketing of Guyana’s crude, and according to a statement from Director of Energy, Dr. Mark Bynoe, the agency remains committed to its timeline.

This month’s first phase is a direct sale process with the second being an open market Request for Proposals (RFP) in early 2020. That phase will be for an agent to market Guyana’s crude entitlements from the Liza 1 field on a term basis.

The department said this was necessary to allow for, amongst other things, adequate preparation in structuring and completing the RFP for marketing in early 2020.

The statement also indicated that given the accelerated timing of first oil and with Guyana’s first lift expected in February 2020, a short-term phase 1 process became necessary. As a result, a select group of nine listed international oil companies (IOCs) were invited to express interest.

The interested parties submitted their proposals in writing and were subjected to a face to face meeting with the DE, to present the full scale of their capabilities. Companies were also required to lay out the details of their proposals.

The companies participating in the phase 1 process include three partners in the Stabroek field, while the others are IOCs with integrated upstream, midstream and downstream value chains, global refining footprints, and experience in the introduction of new crude grades from and into multiple geographies.

Meanwhile, the DE says the sale to Shell Western was based on the following criteria: a competitive pricing that limits the Government’s exposure to market uncertainty, the size, scale and global reach of the Shell trading operations,’ and the company’s high level of integration between upstream, trading and downstream.

Other factors included Shell’s strong foothold in the Latin American markets and the size and scale of their shipping and storage operations in the region, the range of new grades Shell has recently introduced into the market and their willingness to share critical refinery information with the DE,  and finally its readiness to support the DE in operating these cargoes, while the department strengthens its structures and human resource capacity.

The energy department says it remains committed to transparency, accountability and acquisition of best value for Guyana in all its endeavours, including in crude marketing for the Liza oil cargoes.