The price per barrel of Guyana’s oil will be calculated using the Brent crude benchmark after the bill of lading for the cargo is issued and how information on the sales will be released is currently being determined, Director of the Department of Energy (DE) Dr Mark Bynoe says.
“Guyana’s crude is calculated on a dated Brent basis after the bill of lading is issued…Guyana sold its crude on a dated Brent basis, 10 days after the bill of lading,” Bynoe said, in response to questions from Stabroek News. He said that the upcoming cargoes will be sold similarly.
For this year, Guyana is entitled to five cargoes or five million barrels of oil as part of its profit share with ExxonMobil and its partners, in addition to the 2 per cent royalty on all production.
Bynoe recalled that the DE has stated on record that it will be transparent about operations but said that it has to “balance transparency considerations with commercial considerations.”
For this reason, Bynoe said, the agency is working with the Guyana Extractive Industries Transparency Initiative (GY-EITI) to determine a calendar for disclosure of the information. “The DE is working with the GY-EITI to determine information that can be released to the public on a periodic basis rather than a cargo by cargo basis to advance transparency considerations, while simultaneously protecting the commerciality of the contracts in a very competitive environment,” he said.
Stabroek News reported last week that Guyana has been paid US$55 million for its first cargo of crude oil sold in February and the country will receive royalties from production by ExxonMobil in its Liza-1 field on the offshore Stabroek Block next month.
The US$55 million paid for the one-million-barrel cargo puts the price for one barrel of oil at about US$55, Minister of Finance Winston Jordan has said.
The US$55 per barrel figure, Bynoe said, was calculated on a dated Brent basis after the bill of lading was issued.
According to Article 11.2 of the Petroleum Agreement for the Stabroek Block, in any month during which crude is produced and sold, a maximum of 75 percent of crude produced net of losses and operations, can be allocated to permissible recoverable costs incurred by the contractor. This volume of crude is referred to as cost oil. The remaining crude is referred to as profit oil and is to be split equally between the contractor and government.
The DE is responsible for overseeing the sale of the country’s share of oil and it has sold the first three cargoes to Shell Western Supply and Trading Limited and is now looking for a marketer for the other cargoes.
As it pertains to royalties, Bynoe said that the sum has not yet been collected as it is paid one month after the end of the first quarter. He noted that he could not say how much royalties will be collected for this quarter since the time has not yet elapsed.
“Royalties are paid quarterly on gross production 30 days after each quarter. It is not possible to determine the actual royalty that Guyana will be receiving as we have not completed the first quarter for 2020,” he explained.
