The Department of Energy (DE) has seen a flurry of questions since it advertised a request for expressions of interest (EOIs) for a marketer for Guyana’s oil last month and the agency has announced that it had for a second time extended the deadline for submissions.
A long list of questions ranging from specifications for delivery to aspects of the contract and a request to meet with DE Director Dr. Mark Bynoe have been posted to the Ministry of the Presidency’s website by interested parties. The DE, has since responded to all, in addition to notifying of the extension until April 21, falls under the Ministry of the Presidency.
Stabroek News contacted the DE to find out the reason for the two extensions and was told by an employee that they would try to seek a comment from the Head of Agency and reply.
However, up to press time there had been no response. The drastic decline in the price of oil on the world market could make marketing of Guyana’s oil a difficult challenge.
Late last month the agency had advertised EOIs for the provision of marketing services for its share of crude and made it clear that it would not entertain face-to-face meetings with any of the bidders.
It set out the stringent criteria and laid out the scope of services and mandatory documents and experience required, while also giving a background as to why it was seeking the needed services. The notice also explained that the contract period was for 12 calendar months and gave a detailed scope of services.
“December 20, 2019 marked a historic milestone for Guyana, as ExxonMobil and its partners produced the first commercial crude from the Liza field, located approximately 120 miles offshore the coast of Guyana in the Stabroek Block. The output from the first phase is expected to reach a capacity of up to 120,000 gross barrels of oil per day (bdp), utilizing the Liza Destiny Floating Production Storage and Offloading (FPSO) Vessel. The Stabroek Block is expected to produce up to 750,000 bpd by 2025,” the ad explained.
“Most oil producing countries receive a large portion of their revenue from selling the state’s share of oil production. Usually, at the centre of these transactions, is the national oil company (NOC) with a responsibility to sell this oil, and in the absence of a NOC in Guyana, this responsibility must be managed by the Department of Energy (DoE), to sell the oil to International Markets, pursuant to the Petroleum Sharing Agreement dated June 27, 2016,” it added.
The notice stated that interested persons had until March 12 to submit the required EOIs to the National Procurement and Tender Administration Board.
Technicalities
One company asked for an extension, citing the technicalities in the gathering of documents needed for submission and it is unclear if this saw the first extension being granted but it was.
But since then, a number of companies wanted clarity on the EOIs and wrote to the agency for assistance and even asked to have a meeting with Dr.Bynoe.
In response, the DE said stated how interested firms may obtain further information and seek clarifications and listed its email address, doe@motp.gov.gy, and gave office hours. It said that firms may also, in writing, request clarification up to seven (7) days before the EOI Extended Submission date and that responses to those questions would be posted on the Ministry of the Presidency website. “No face to face meeting will be permitted or entertained by the Department of Energy,” it reminded.
Another person queried about the stated 12-month contract period, asking which will be the first month while another wanted to know if after the elapsed time there will be provision for an extension. .
In its response, the DoE said that the Commencement of the Contract is expected to be in June 2020, and the month of the first lift is expected to be in July 2020.
“The first lifting will be confirmed closer to (the) time since it is very much dependent on the pace of production during the first half of 2020,” the response stated.
“An extension to the impending Term Contract may be likely given the prevailing conditions at the time when the Contract end date is at hand. Notwithstanding, the Department of Energy has planned for a new Contract period to commence at the end of the Contract period which will result from this current process,” it added.
And with the specification that the minimum volume stated to be marketed would be 5 cargoes of 1,000,000 barrels each, one interested party asked for the total volume in barrels to be marketed during the 12 months.
The agency said that the total volume in barrels to be marketed during the 12-month contract could not be determined but added that “the minimum volume to be marketed during the Term Contract is 5 cargoes of 1 million barrels each.”
Most of the other questions centred on the technical aspects of preparation and submission of the EOIs and the process which follows that submission.
Questions were asked about how long after the EOIs are submitted, that tenderers should be expected to be shortlisted and that result announced.
“After the submission of the EOI, the Shortlist will be determined, and those shortlisted are expected to be invited to submit their Request for Proposals (RFP), no later than end of April 2020,” the DoE said while promising that all shortlisted companies will be made public.
Mandatory
And where the DoE asked that a five-year record of the company was mandatory, one company wanted to know what information pertaining to HSE policy was needed while another asked how verification of information will be done.
“As part of the HSE policy statement please provide the outline of the Health, Safety, Security and Environmental Management System Framework of your company. The 5 years record should include historical data of the trading organization on incidents recorded resulting to injuries, threat or loss of life and/or hydrocarbon spills,” the DoE said.
“The DE intends to use the standard international best practice methods of verification of this and other claims made by Firms during this process. This item 4 (xii) therefore, requires that interested Firms submit, with their EOI, authorisations which will give the DE expressed permission to verify the information submitted from whichever body or authority issues the respective compliance documents. Our requests for particular submission requirements to be made by interested Firms, are geared towards us being able to shortlist the most suitably qualified firms.
The DoE made clear that the process is a public competitive one which requires the Expression of Interest by companies to be submitted in the format as “specified in our Request for Expression of Interest as published” and no other way.
And since neither the DoE nor NPTAB is yet equipped to receive online and electronic submissions, all tenders must be hand deposited, in their suitably enveloped marked Expressions of Interests by 9am on the date, into the Tender Box situated on the Ground Floor of the National Procurement and Tender Administration Board, Ministry of Finance Compound, Main & Urquhart Streets, Kingston, Georgetown, Guyana.
However, companies will still have to submit a copy of their document on a thumb drive along with the required hard copies. In the case of any discrepancy between the two documents, the hard copy prevails.
The also agency explained that the Request for EOIs marks the commencement of the two-stage Procurement process. “This invitation also serves as the open tender, which will lead to a technical and commercial bid amongst Shortlisted Firms and that the notice and invitation for EoIs also serves as the open tender, which will lead to a technical and commercial bid amongst Shortlisted Firms”.
