AFC wary of govt selling crude directly but Natural Resources Minister says nothing to fear

Last Updated on Tuesday, 15 February 2022, 21:52 by Denis Chabrol

The opposition Alliance For Change (AFC) and the Guyana government have disagreed over whether the administration should sell its share of oil directly or hire another crude marketer.

Amid the AFC’s criticism that the government does not have the capacity to do so on its own and that Guyana would not save by cutting out the marketer, Minister of Natural Resources Vickram Bharrat said there is evidence that the country had previously sold its share directly.

He restated that Guyana would save US$25,000 per lift that it pays the crude marketer. “It makes perfect sense to sell the crude rather than to market the crude,” he said. Mr. Bharrat explained that due to the demand of Guyana’s “sweet crude, lower sulphur crude” a lot of companies are interested in buying Guyana’s product and “it makes perfect sense because it saves us from paying a marketing fee.”

The Natural Resources  Minister said Guyana planned to sell directly but only at Brent price. “We are not going to accept anything other than that so it is not that we are entering an arrangement where we’ll sell it at a price that we will decide. It will be market price,” he said.

AFC General Secretary David Patterson and Executive Member Dr Vincent Adams said Guyana did not have the technical capacity, experience  and international linkages to sell crude  on the market. “It is not just simply a person sitting in an office making a call,” he said, adding that no person or group has been retained to do so,” said Mr. Patterson. He feared that Guyana may not get the best price and there was a likelihood of corruption. “What we do feel is that the government will like to sell the crude to specific individuals and specific nations at whatever price the government agrees,” he told a news conference said. “It’s going to cost you more in the long-run if you don’t have the experience,” Dr Adams said, adding that government needed to provide its analysis.

But the Natural Resources Minister stressed that the Petroleum Department was developing capacity on an ongoing basis but even now government was equipped to sell its entitlement. “We have a lot of technical people working with us and that is why we have been able to lock in some good prices in 2021; we have had some real good prices for our crude in 2021… so, yes, I think that we have the capability now,” he said.

Mr. Bharrat confirmed that an Indian company has asked to buy Guyana’s crude but government was yet to decide.