Govt. yet to share procurement details on marketer for fourth oil lift

Jan 24, 2021 News

Kaieteur News– The People’s Progressive Party/Civic (PPP/C) administration is yet to disclose to the public, the procurement process that led to the selection of Hess Corporation, one of the Stabroek Block partners, as the marketer of Guyana’s crude for its fourth oil lift. These revelations come on the heels of promises by Vice President (VP) Dr. Bharrat Jagdeo, after he had assured Kaieteur News that he would conduct a press conference to discuss these procurement details in the first week of January.
This publication has not received any updates from the VP on when this press conference will be held.

Vice President Bharrat Jagdeo

In late December, Kaieteur News had reported that Guyana’s fourth lift of approximately one million barrels of sweet, light Liza crude was actually marketed by Hess International Sales LLC, and sold to BP Oil Supply, a division of BP Products North America. VP Jagdeo had confirmed this with this publication.
In another section of the media, Minister of Natural Resources, Vickram Bharrat, is quoted as saying that the fourth oil lift was sold by Hess via “spot sale.” No explanations were given by Bharrat regarding what this type of sale meant. Cursory checks, however, would show that a spot sale means a one-off commitment for a defined volume of goods to be delivered at an agreed location on an agreed date at an agreed price.
In the meantime, Central Bank Governor, Dr. Gobind Ganga, had said that the country is expected to receive US$49.3M for the sale of the fourth lift. He had told this newspaper that this amount will take the total revenue in the Natural Resource Fund (NRF), which also holds royalties from the Liza Phase One Project, to approximately US$198M.
Guyana’s first three cargoes of approximately one million barrels of oil were sold to Shell Western Supply and Trading. The first cargo was sold on February 19, 2020, raking in nearly US$55M. The second lift brought in US$35M while the third brought in US$46M.
One resource watchdog that is expected to provide information on oil sale agreements in a prompt fashion for public scrutiny is Guyana’s Extractive Industries Transparency Initiative (GY-EITI).
Following several checks on the local chapter’s website, no independent information was published about the agreement the Government entered into with a new oil marketer, Hess Corporation or even for Shell Western Supply and Trading.
Requirement 4.2 of the EITI Standard that Guyana is expected to adhere to explicitly states: “Where the sale of the State’s share of production of oil, gas and/or mineral resources or other revenues collected in kind is material, the government, including state-owned enterprises, are required to disclose the volumes received and sold by the state (or third parties appointed by the state to sell on their behalf), the revenues received from the sale, and the revenues transferred to the state from the proceeds of oil, gas and minerals sold. Where applicable, this should include payments (in cash or in kind) related to swap agreements and resource-backed loans.”
The Standard goes on to state that, “The published data must be disaggregated by individual buying company and to levels commensurate with the reporting of other payments and revenue streams (4.7). Multi-stakeholder groups, in consultation with buying companies, are expected to consider whether disclosures should be broken down by individual sale, type of product and price.”