Despite weakening demand for oil due to the coronavirus and a global oversupply of the commodity, Guyana’s Director of Energy Dr Mark Bynoe expressed optimism for a turnaround.
During a press briefing yesterday, he noted that the recent move from the Organization of Petroleum Exporting Countries to reduce oil production has resulted in a rebounding of crude prices.
“More recently, as the historic oil cuts agreed to by the Oil Producing and Exporting Countries plus (OPEC+) and the partial opening up of some economies, we are beginning to see a gradual increase in Brent, moving up to the mid-US$20s and WTI (Western Texas Index) trading at just around US$19 per barrel,” Bynoe reasoned.
The director explained further that restrictions on international travel and State quarantines have impacted on production timelines at the Liza project. There are currently two active rigs drilling from the Liza Destiny floating production, storage and offloading (FPSO) unit.
However, he disclosed that a crew change is needed for two inactive rigs, and so the Department of Energy is working with the Ministry of Citizenship and the COVID-19 Task Force to ensure smooth operation.
“To date the Liza 1 field has produced over eight million barrels of oil, with average daily production of between 75 – 80 kbd, with an expected ramp-up to 120 kbd by early June 2020,” the director of energy noted.
During the press conference, Bynoe also shared that Guyana raked in “US$55 million for its approximately first 1 million barrels of oil” from its first shipment of oil on February 19.
“This was the first of three cargoes that were contracted to Shell Western Supply and Trading. The revenue from the first sale was deposited into the Natural Resource Fund (NRF) on March 11, 2020. Guyana’s second lift of approximately 1 million barrels of crude is projected for the third week of May 2020,” the energy director said.
Guyana also received its first royalty payment, which it deposited on April 28, 2020, into the NRF. The country collects the payment on a quarterly basis, “30 days after each quarter on gross production”.
As the Government of Guyana moves to strengthen the institutional capacity of the nascent industry, Bynoe disclosed that the Department of Energy has contracted the services of a petroleum accounting specialist. In the interim, the department is trying to secure the services of a contract administration specialist, sub-surface engineer, and an oil and gas advisor to the director.