Guyana’s share of Liza crude to be sold to Shell’s unit First lifting in February, all cargoes to be loaded by mid-2020
Houston — Guyana’s government will sell the first three cargoes of the new Liza crude produced offshore Guyana to a trading arm of Shell on a Dated Brent basis, the country’s Department of Energy said Tuesday. Guyana did not reveal the price and volume for the cargoes, which represent the country’s share of the production. However, it said the direct sale was to Shell Western Supply and Trading and the first lift is expected to take place in February, with the loading of the three cargoes completed by mid-2020. “The sale has been premised on a Dated Brent price basis which reflects the tradable, spot market value of crude oil,” the government said in a statement. The decision to sell the crude will provide competitive pricing that will limit the Guyanese government’s exposure to market uncertainty, according to the statement. Shell emerged the winner to buy the government’s first cargoes and was selected from a group of other international oil companies. The Guyanese government is planning a second phase for selling its crude by launching an open market search for a marketing agent that will market the country’s crude entitlements from the Liza 1 field on a term basis. It has been an eventful week regarding Guyana’s offshore crude oil. An ExxonMobil-led group announced late last week that production of Liza crude had begun ahead of schedule. China’s CNOOC and Hess are also partners in the Stabroek consortium. Exxon and its partners on Monday said that they made another oil discovery called Mako, located offshore Guyana, adding to anticipated Liza production. Liza Phase 1 is producing from the Destiny floating, production, storage and offloading facility and will peak at 120,000 b/d of oil over the next several months. Liza Phase 2, which will use the FPSO Unity, was sanctioned this year and is expected to produce up to 220,000 b/d when it comes online in mid-2022. It’s a monumental development for the small South American country, which before now has seen no oil and gas production and has no local refineries. Liza crude is considered medium sweet with a typical gravity of 32.1 API and sulfur content of 0.51%. Nick Note: a hundred thousand here, a hundred thousand thousand their and soon you have another 340,000 BPD of crude hitting the market. OPEC will give up the impossible. The only way to do this is get prices low enough to knock the high cost heavily in debt producers out of the market. And you do that by getting the price up and sucking them in… then you bankrupt them by taking the market a LOT lower.