Guyana’s first export by VLCC will have little impact in the current global market awash with cheap crude oil, but once the OPEC cartel and Russia return to their former pricing strategies, Guyana’s light low sulphur crude oil may prove popular
With Texas WTI and Brent crude oil hitting recent historical lows of less than US$25/bbl, the lowest since 1991, it may seem to be a strange time to release new reserves. ExxonMobil was not to know that in 2015 when the crude oil price was twice as high and its exploration programme hit reserves of a potential 750,000 b/d off the coast of Guyana. That is literally one barrel per day for each resident of the (formerly) economically poor South American country.
Five years later and the first VLCC is due to load at the offshore Liza crude oil project. The first large cargo is destined for loading on the Chinese-built, owned and operated VLCC New Melody. The destination of the crude oil has not been revealed but it is widely assumed to be China.
According to VesselsValue’s newly introduced management/operational structure, the commercial manager of New Melody is Koch Logistics.
New Melody loaded approximately 50% of its 2M-barrel cargo capacity at Colombia’s Covenas port, according to Reuters and is now sailing to FPSO Liza Destiny, which is the crude oil loading terminal for Guyana’s nascent oil field. New Melody is scheduled to load 1M barrels of Liza crude oil.
According to ExxonMobil, the Liza crude oil is produced offshore Guyana by a joint venture operated by ExxonMobil’s affiliate Esso Exploration and Production Guyana Limited, holding a 45% interest in the block, together with Hess Guyana Exploration (30%) and CNOOC Petroleum Guyana Limited (25%). The Liza oil field is located offshore Guyana in the Stabroek Block approximately 190 km northeast of Georgetown.
There is a reported 8Bn barrels of crude oil reserves in the field. The characteristics of the crude oil is that it is a light (gravity 32.1), low sulphur (0.51%) crude oil suitable as a general purpose crude oil for production of middle distillates and mogas, and has the potential to create its own demand among traders in a normal market.