Guyanese oil producers increase their exports to European refineries

By: News Team

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Guyana’s oil producers have increased their exports this year to European buyers seeking alternatives to Russian crude, according to vessel tracking data.

Government bans on Russian oil since the Ukraine invasion have spurred demand for alternative crudes, and Guyanese oil is better suited to refineries from the UK to Italy than competing Latin American grades.

So far this year, 49% of Guyana’s total oil exports have gone to Europe, up from 16% in 2021. Shipments to Europe averaged 110,000 bpd from January to early September, according to the data. Refinitiv Eikon tanker tracking data, more than the entire daily volume shipped to all destinations in 2021.

Shipments grew as Guyana’s second floating production, storage and offloading facility began production this year. In recent days, the South American country’s production reached 350,000 barrels per day (bpd), almost triple that at the beginning of the year.

The oil, produced by a consortium of Exxon Mobil (NYSE: XOM ), Hess Corp (NYSE: HES ) and CNOOC (HK: 0883 ), is exported entirely. Guyana sells its share through open market auctions and through a business unit of Saudi Aramco (TADAWUL: 2222 ).

Neither side has entered into long-term supply agreements with specific customers for the oil. Last year a supply deal with India fell through over price disagreements.

Spain’s Repsol (BME: REP ), Italy’s Eni (BIT: ENI ) and Britain’s BP (LON: BP ) have taken shipments, according to the data. Repsol and Eni imported Venezuelan crude in the second quarter, but shipments have been suspended since July.

Exxon and Hess declined to comment on the trade deals. Guyana’s energy ministry, Eni, Repsol and BP did not immediately respond to requests for comment on the exports.

On Thursday, Hess CEO John Hess told investors that Guyana wants to “move forward as quickly as possible so that we can get the cash resources to develop our country.” A development plan for the consortium’s fifth project, Uaru, it 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 accounted for 16% of the total, according to Refinitiv.

Guyana currently produces two grades of crude: a light, medium sweet oil called Liza, and an even lighter grade called Unity Gold.

By 2027, the consortium led by Exxon, which only started production in 2019, plans to produce 1.2 million bpd. Guyana is expected to soon schedule an auction of oil and gas blocks to attract new companies to its offshore fields.

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