Last Updated on Saturday, 15 August 2020, 12:03 by Writer
Guyana has put a “hold” on the international bidding process for oil companies to lift and sell its share of crude oil sales from one of ExxonMobil’s several oil fields offshore the north-east coast of South America, Vice President Bharrat Jagdeo announced Friday.
He said the now one-week-old administration, which was sworn in five months after a disputed general election, decided to recall that bid and open a fresh round to allow companies that were fearful of doing business with the then caretaker administration to submit expressions of interest for evaluation.
“In terms of the lifting of our oil, we have put a hold on the evaluation of the bids that came in. We made it clear in the (election) campaign that people should not be submitting bids to an illegal government that was there at that time and it would be unfair to companies who acted decently and did not put in a bid because they recognised the threat to democracy and you had an illegal government that they will now be excluded from the process,” said Jagdeo.
The then government had lost a no-confidence motion in December 2018 but instead of calling elections by March, 2019 had remained in office pending court actions and the appointment of a Chairman of the Guyana Elections Commission. Eventually, elections were called one year later and A Partnership for National Unity+Alliance For Change (APNU+AFC) lost the elections. After a series of court battles and international pressure, the Elections Commission last week declared the People’s Progressive Party (PPP) the winner.
Among the 34 companies that have expressed an interest to transport and sell Guyana’s oil to the United States and Asian markets is ExxonMobil which is the only company that has so far found oil, totalling 8 billion barrels, in commercial quantities offshore Guyana.
Shell Western Supplies and Trading, which had been hand-picked by government to market Guyana’s first one million barrels of oil, is also hoping to win this competitive bidding process.
The other bidders come from Hong Kong, Brazil, United States, United Kingdom, The Netherlands, Switzerland, United Arab Emirates, Singapore, Trinidad and Tobago, and Guyana.
After the expressions of interest are evaluated, the shortlisted companies will be asked to submit detailed bids.
Also submitting an EOI was Hartree Partners LLP, a United States company that had done a desktop study that had discouraged Guyana from building a refinery on the grounds that it would be too expensive and uncompetitive because there is a lot of spare refinery capacity around the world.
The companies, during this EOI phase, were required to submit stacks of documents including information that will facilitate due diligence on their background, capacity and experience in crude oil trading, and financial records for at least the past five years.
After these are analysed, a shortlist will be created and they will be invited to submit full-fledged bids containing technical capacity and the proposed cost for crude marketing services.