The first three cargoes of Guyana’s crude oil will be sold to the Barbados-based Shell Western Supply and Trading Limited, the South American nation announced today.
Guyana’s Department of Energy of Energy (DE) said the company was selected after a competitive process that involved nine international oil companies selected to express interest for the lifting and placement of the expected initial three million barrels of oil from the Liza development.
The agreement, which is based on Dated Brent price reflecting the tradable market value, is subject to the completion of the contract.
The selection was part of the country’s phase 1 process, which focuses on direct sales, to facilitate the accelerated timeline for its first oil lift which is set for February 2020. The second phase is to secure a marketing agent for the country’s crude oil entitlements, the DE said.
By the end of the third lift, the quality of the crude and any operational issues around production are expected to have stabilised, the Department said.
Under the selection process, each company had to submit written proposals and then meet with the DE representatives to fully present their scaled capabilities. “Companies were also required to lay out the details of their proposals. The face to face presentations, allowed for robust interrogation and lengthy clarifications and questions. This was an integral part of the selection process, especially in the context of the nascent nature of Guyana’s experience with this process of crude commercialism, given that the country is now only a few days-old new producer.”
Among the criteria considered for Shell’s selection were:
The DE also said it is committed the transparency, accountability and getting the best value for its crude oil, the Department said.