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$250M approved to pay oil tanker waiting fee
The Liza Destiny
In a recent Committee of Supply session, Minister of Natural Resources, Vickram Bharrat, disclosed that a substantial allocation of $250 million has been earmarked for demurrage fees this year. Demurrage refers to the cost payable to the owner of a chartered ship on failure to load or discharge the ship within the time agreed.
Minister Bharrat previously explained that the demurrage expenses relate to the waiting time for tankers that are receiving or that are coming to Guyana to uplift crude from the Floating Production Storage and Offloading (FPSO) vessels. He said if for any reason there is a delay in the transfer of crude from the FPSO to that tanker, then Exxon incurs a demurrage expense which is in the crude lifting agreements signed by the previous administration. The agreement is to share that expense with Exxon.
On Wednesday, Minister Bharrat said, “In 2020, we catered for 27 lifts. However, there was demurrage on 19 lifts. In 2021, we catered for 42 lifts; there was demurrage on 17 lifts. In 2022, we catered for 101 lifts there was demurrage on 45 lifts.”
Bharrat then provided insights into the 2023 situation, citing maintenance on FPSOs and issues with the Liza Destiny FPSO main compressor as contributing factors.
The minister said, “In 2023 was a year when both FPSOs (Liza Destiny and Liza Unity) underwent maintenance, normal maintenance, and then we had an issue with the leaser destiny FPSO, where the main compressor went down, reducing significantly the production. So, production was ongoing, but it was reduced by almost half, below 100,000 barrels per day, so thereby contributing to a higher increase in lifts that incurred demurrage costs.”
For this year, Minister Bharrat revealed the increase in lifts, projecting 205 lifts with an anticipated demurrage on 80 lifts. “Hence, the request for allocation of $250 million for 2024,” Minister Bharrat added.
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