February 10, 2021

Liza Destiny FPSO, the first of what will be several FPSOs producing oil from Guyana's giant Stabroek block - Image Credit: Hess

Liza Destiny FPSO, the first of what will be several FPSOs producing oil from Guyana’s giant Stabroek block – Image Credit: Hess

U.S. oil producer Hess Corp has been selected to market two Guyana crude oil shipments as the emerging oil power seeks a permanent partner to handle its share of a major offshore oil find, the country’s vice president said on Tuesday.

The South American country has become an oil hotspot after a consortium led by Exxon Mobil Corp discovered more than 8 billion barrels of oil and gas off its coast. Guyana receives a portion of the consortium’s output, which it then sells.

But with no domestic refining nor state oil company, Guyana relies on private companies to market its share. President Irfaan Ali’s government re-launched an advanced search for that partner after taking power last year, receiving 29 bids in October.

“The evaluation criteria we believe was set by the Department (of Energy) resulted in the evaluators having to disqualify 28 of the 29,” Guyana Vice President Bharrat Jagdeo told reporters on Tuesday, blaming “nonsensical” criteria inherited from the prior government, without elaborating.

The only bidder to meet the formula was a unit of Russian oil firm Lukoil, he said, meaning a selection would not have been “competitive.”

Instead, Guyana asked Hess, Exxon and China’s CNOOC Ltd – members of the consortium operating the Stabroek offshore block – to submit bids to lift crude from the Liza Destiny floating production storage and offloading (FPSO) facility. Hess presented the “best terms,” Jagdeo said.

A Hess spokesman declined to comment, citing a practice of not publicly discussing commercial arrangements. Exxon also declined to comment and CNOOC did not immediately reply to requests for comment. Lukoil did not respond to a request for comment sent after business hours in Moscow.

Guyana’s government had marketed its first three shipments through a short-term deal with Royal Dutch Shell. 

(Reporting by Luc Cohen in New York; Editing by Sam Holmes)

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