Guyana scraps tender for crude marketer

Guyana's new government has cancelled a tender for a one-year contract to market the government's share of Liza crude from the offshore Stabroek block.

The South American country's former government had shortlisted 19 bidders to make technical and financial proposals to market a minimum of five 1mn bl cargoes of 32.1°API Liza crude in 2020-21.

The tender was "unfair" to many companies that "acted decently and did not put in a bid because they recognized that there was an illegal government in place," vice president Bharrat Jagdeo said on 15 August, without indicating when new bids would be sought.

The new administration was inaugurated on 8 August after a five-month political impasse that followed 2 March elections.

"We made it clear in the campaign that companies should not be submitting bids to an illegal government that was there at that time," Jagdeo said.

The shortlist was drawn by the previous government from 34 bidders that applied when the tender closed on 21 April.

The shortlist included ExxonMobil that spearheaded the country's deepwater oil play, along with Shell, BP, Equinor, Total, traders Vitol and Glencore, and Brazil's state-controlled Petrobras.

None of the companies has reacted publicly to the decision to scrap the tender.

The energy department was evaluating the technical and financial proposals from the shortlisted companies in anticipation of announcing an award "as soon as possible," the department's director Mark Bynoe told Argus on 6 August.

"With a new administration in place we will have to give some consideration for it to be fully briefed," he said at the time.

Guyana awarded the first three cargoes of its share of Liza production to Shell Western Supply and Trading in a restricted opening tender. The first 1mn bl allotment loaded in February 2020, the second in May and the final in early August.

Liza is produced by an ExxonMobil-led consortium at Stabroek, where output began in December 2019. The consortium includes US independent Hess and Chinese state-owned CNOOC unit Nexen.

Production is expected to reach 120,000 b/d in August, ramping up to 750,000 b/d in 2025.

Income from the first two lifts by Shell and royalties from the ExxonMobil consortium have boosted Guyana's earnings from oil in 2020 to $98.6mn, according to the finance ministry.

By Canute James