Guyana oil producers ramp up exports to thirsty European refiners - Reuters report

Guyana oil producers ramp up exports to thirsty European refiners – Reuters report

Sep 09, 2022 News

Vessels carrying supplies for an offshore oil platform operated by Exxon Mobil are seen at the Guyana Shore Base Inc wharf on the Demerara River, south of Georgetown, Guyana January 23, 2020. REUTERS/Luc Cohen

REUTERS – Cargoes to Europe averaged 110,000 bpd from January through early September, according to Refinitiv Eikon tanker tracking data, more than the entire daily volume shipped to all destinations in 2021. The shipments grew as Guyana’s second floating production storage and offloading (FPSO) facility began pumping this year.
Oil producers in Guyana this year have boosted exports to European buyers seeking alternatives to Russian crude, according to vessel monitoring data. Government bans on Russian oil since the invasion of Ukraine have spurred demand for alternative crudes, and Guyanese oil fits refiners from Britain to Italy better than rival Latin American grades do. So far this year, 49% of Guyana’s total oil exports have headed for Europe, up from 16% in 2021. Cargoes to Europe averaged 110,000 bpd from January through early September, according to Refinitiv Eikon tanker tracking data, more than the entire daily volume shipped to all destinations in 2021.
The shipments grew as Guyana’s second floating production storage and offloading (FPSO) facility began pumping this year. In recent days, the South American country’s output hit 350,000 barrels per day (bpd), almost triple its level early this year. The oil, produced by an Exxon Mobil, Hess Corp and CNOOC consortium, is entirely exported. Guyana sells its share through open-market tenders and via a trading unit of Saudi Aramco.
None of the parties have struck long-term supply agreements with specific customers for the oil. A proposed supply deal with India last year failed over price disagreements. Spain’s Repsol, Italy’s Eni and Britain’s BP have taken cargoes, the data showed. Repsol and Eni imported Venezuelan crude in the second quarter, but shipments have remained suspended since July.
Exxon and Hess declined to comment on commercial agreements. Guyana’s energy ministry, Eni, Repsol and BP did not immediately reply to requests for comment on the exports. On Thursday, Hess CEO John Hess told investors that Guyana wants “to move forward as expeditiously as possible so they can get the cash resources to develop their country.” A development plan for the consortium’s fifth project, Uaru, will be submitted to the government for approval later this year, he said.
In 2021, Guyana exported a total of 101,000 bpd of crude, most of which went to Asia, while shipments to Europe represented 16% of the total, according to Refinitiv. Guyana is now producing two crudes grades: a medium to light sweet oil called Liza, and an even lighter grade called Unity Gold. By 2027, the Exxon-led consortium, which only in 2019 inaugurated output, expects to pump 1.2 million bpd. Guyana is expected soon to schedule an auction of oil and gas blocks to attract new companies to its offshore fields.

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