Guyana sells spot crude cargo to Hess: Correction

Corrects sale price in second paragraph.

Guyana awarded a fourth 1mn bl spot cargo of its crude entitlement from the ExxonMobil-operated Stabroek block to US independent Hess, natural resources minister Vickram Bharrat told Argus today.

The cargo of 32.1°API Liza crude was sold at $49.3/bl.

The government has not yet awarded a tender to market around five more cargoes in 2021, from among 29 companies in the running, Bharrat said.

Guyana's first three 1mn bl cargoes were awarded to Shell Western Supply and Trading. The cargoes loaded in February, May and early August 2020. The new non-Opec oil producer had scheduled five lifts of its entitlement in 2020 but did not achieve this because of lower-than-projected output from Stabroek. ExxonMobil hit its 120,000 b/d goal in December after resolving technical glitches and operational delays caused by the Covid-19 pandemic.

ExxonMobil has a 45pc stake in Stabroek, with Hess holding 30pc and Chinese state-owned CNOOC unit Nexen with 25pc.

Bharrat did not indicate when a marketer for the 2021 lifts will be named. "All possible options are considered so that the country can get the best value for its share of crude," he said.

The government relaunched the tender for a marketer in August 2020 after cancelling a bidding round initiated by the former administration during a period of political uncertainty that followed 2 March parliamentary elections.

Hess is among the companies vying to succeed Shell in the relaunched tender. Shell is also seeking a new marketing contract. Other bidders include Equinor, Total, traders Gunvor and Glencore, and the UK trading arm of Saudi Arabia's Aramco.

Income from the Guyana's crude loadings and upstream royalties earned the South American country $194mn since the December 2019 start of production. In February 2020 the government had forecast earnings of $300mn and reduced this projection to $200mn in July after oil prices collapsed.

Guyana's oil income is going into a new sovereign wealth fund at the Federal Reserve in New York.

ExxonMobil estimates recoverable resources of 9bn bl oil equivalent (boe) on Stabroek, and forecasts 750,000 b/d production from the block in 2026.

The ongoing development comes amid a flare-up in tensions with neighboring Venezuela over conflicting territorial claims.

By Canute James