TERMS OF REFERENCE
GUYANA PETROLEUM RESOURCES GOVERNANCE AND MANAGEMENT PROJECT
CONSULTING SERVICES FOR CRUDE OIL MARKETING AND ASSOCIATED LOGISTIC MATTERS IN THE OIL AND GAS INDUSTRY
As Guyana moves into a new chapter of history as an emerging petroleum producing nation, sustainable development lies at the core of the Government of Guyana’s goals for the sector. Being keenly aware that petroleum is a non-renewable resource, considerations related to its extraction and conversion into financial capital highlight the requirement and responsibility to ensure that the resource is prudently managed, from the time petroleum ‘appears’ at the wellhead, for the long-lasting benefit of Guyana. In developing the policies, legal framework, institutions and systems to oversee and manage the sector, the Government of Guyana is committed to ensuring that this framework allows both present and future generations to reap the benefits.
Guyana’s petroleum sector is progressing swiftly with first oil expected in 2020. This planned petroleum development, coupled with ongoing assessment of new discoveries, has led the Government of Guyana to focus on ramping up preparations to oversee the upstream sector (exploration, development and production); to develop policy and legislation, to build up internal capacity building, to promote governance and transparency, and to undertake financial and economic planning.
The Guyana Petroleum Resources Governance and Management Project (the ‘Project’) is supported by the World Bank and aims to enhance the Government’s capacity to achieve its management goals for the petroleum sector through interventions focused on supporting the enhancement of legal and institutional frameworks and the strengthening of the capacity of key institutions to manage the oil and gas sector in Guyana.
2. OBJECTIVES AND SCOPE OF WORK
The objective of the assignment is for the Consultant to provide advisory services and technical support towards the establishment of a crude oil marketing function – covering all aspects of crude marketing and logistics of crude oil produced in Guyana, together with preparation of competitive tenders for such marketing - within the Department of Energy (DE), under the Ministry of the Presidency.
Under the present Terms of Reference, the Consultant is invited to fulfil the scope of works described below:
(a) Provide views on world crude markets (volumes forecast and price estimates by regions) and more specifically the US Gulf Coast and Asian markets;
(b) Provide advice on the best crude marketing strategy for the Guyanese Government’s share of lifted crude oil resulting from its production sharing contract(s), based upon the criterion on maximising Government revenues, highlighting the pros and cons of:
- Single seller or agent versus multiple sellers;
- Single market or a variety of markets;
- A fee/bbl marketing arrangement based on spot sales vs. longer term sales to a specific buyer;
- FOB crude oil sales versus CIF sales or a mixed FOB/CIF sales portfolio including shipping;
- Long-term vs. medium-term vs. short-term sales or a mix thereof;
(c) Provide advice on the possible pricing formulas potentially achievable for each category of possible sales (destination, duration); spot references for European sales; Latin America, Africa and Asia sales; long term price formulas;
(d) Provide advice on the optimal marketing strategy to create a benchmark crude premium for Guyana crude;
(e) Develop a risk management strategy to include pricing objectives; approved contractual and financial instruments; risk exposure limits; counterparty credit limits; hedging policy;
(f) Provide advice on comparative economics of domestic use of crude oil compared to international markets and how to maximise government revenue from crude oil sales
(g) Define the organizational requirements for Guyana’s crude oil marketing function including business processes; staffing and skills requirements; internal procedures and approval processes; budget resources; data requirements; monitoring and reporting requirements and pragmatic time line to achieve an operational crude oil marketing function.
(h) Propose interim methodologies for procuring a transparent marketing arrangement that maximises the government revenues from crude oil sales such as fee/bbl marketing arrangements.
(i) Train DE staff, and other petroleum related agency staff as identified by DE, via group workshops, individual mentoring and supervised on-the-job training. Topics to be covered include (inter alia):
- Commercial terms governing international crude oil marketing
- Oil pricing
- Oil quality and basis differentials
- Cargo operations including lifting and scheduling
The Consultant will base his/her work on the crude oil volumes available for export as provided by the operator(s) and its updates from time to time.
3. DURATION OF ASSIGNMENT AND DELIVERABLES
These activities are estimated to take place over a period of four years commencing on ….2019. The Contract will initially be issued for one year with a possibility of renewal for the duration of the Project period based on performance.
The core deliverables for this assignment are the provision of advice and assistance to the Client as required in executing the Scope of Work. The deliverables should also include:
• Kick-off meeting;
• Regular status reports;
• Well-documented written advice and recommendations in answers to queries from the Department of Energy, Ministry of the Presidency.
All deliverables shall be submitted in English and electronically to the Department of Energy, Ministry of the Presidency, for review and approval. The World Bank may also review the deliverables for consistency with World Bank Safeguards. It is expected that certain deliverables may require several drafts to incorporate comments by the World Bank, the Client, and relevant stakeholders before they are determined to be final.
4. IMPLEMENTATION ARRANGEMENTS
• The Consultant selected for this assignment will work under the direction of the Director of the Department of Energy (DE), Ministry of the Presidency, or other designated official within the DE; and will work closely with other government agencies involved in the oil and gas sector as required.
• The Department of Energy will designate a Focal Point to work with the Consultant. The Focal Point will provide existing documentation regarding the Project and support the coordination and execution of the Consultant’s tasks and activities, including arranging meetings with the Operator(s) as needed; nevertheless, the Consultant will be responsible for obtaining all the necessary public information required to perform the tasks included in this TOR.
• The consultant’s work will be carried out over 90 days per year (in the first year) of which at least 60 days will be spent in Guyana. The consultant will make an inception visit of at least 3 weeks to formulate work programs, perform initial training, and support urgent commercial decisions facing DE. Subsequent visits will be for at least two weeks in duration.
• It is expected that a major part of the work will be conducted in the Consultant’s office, with regular visits to Department of Energy, Ministry of the Presidency. When not physically present in Guyana, the consultant will remain in close contact with the DE team to supervise and support the crude oil marketing activities. The Consultant is expected to be available for audio or videoconferences when required.
• The Consultant shall make its own arrangements for carrying out its services, including accommodation, transport, health insurance, document(s) translation/reproduction.
5. EXPECTED EXPERIENCE AND REQUIRED QUALIFICATIONS
To be eligible for the assignment the Consultant should exhibit:
1. At least 20 years’ relevant experience in the commercial functions of an international oil company of which at least five years’ experience in crude oil trading and marketing, and have been involved in crude marketing studies. Experience in crude oil marketing negotiations for at least three different clients in relation to major sales of crude oil would be an asset.
2. Demonstrated experience and ability to advise on the following topics:
a. Crude oil marketing: experience (from within five years preceding the date of the Consultant’s application) of advising sovereign governments on crude oil marketing;
b. Associated Logistics: experience (from within five years preceding the date of the Applicant’s application) of the associated shipping logistics of crude oil marketing;
c. Marketing Tenders: experience (from within five years preceding the date of the Consultant’s application) of advising sovereign governments on outsourcing crude oil marketing and associated logistics on a fee/bbl basis.
3. Bachelor’s degree or higher in Engineering, Finance, Economics or other relevant discipline;
4. Excellent drafting ability and presentation and communication skills, both oral and written in English; ability to explain complex technical issues.
5. Excellent organizational and management skills and ability to complete deliverables in an efficient and timely manner.
6. Good understanding of the requirements of the consultancy, ability to work independently with minimum supervision.
7. Strong interpersonal and communication skills.
The nominated person’s previous experience of advising the World Bank or its agencies on crude oil marketing should be disclosed.
6. CONFLICT OF INTEREST
The Consultant is required to comment on any potential, actual, or perceived conflicts of interest arising out of other assignments or a conflicting involvement in other assignments. Where the Consultant currently represents any party or potential stakeholders that would create conflict of interest or to the extent any conflict of interest would arise in the future, the Consultant shall detail any measures that may be required to avoid conflicts of interest in connection with the implementation of this assignment.
The Consultant and / or its employees agree to keep confidential all information that these receive, directly or indirectly, from the Authorities, its agencies or ministries, and any other stakeholder, as well as all copies or analyses that it makes, or have been made by third parties, on the basis of such information (collectively, the Material). The Consultant will use the Material exclusively for the purpose of preparing deliverables relevant to this assignment. The confidentiality obligations will not apply to information in the public domain. The Consultant will only permit access to the Material to persons within their organizations on a need-to-know basis. The Consultant will explicitly inform such persons of the confidential nature of the Material and, prior to providing them the Material, subject them to the confidential obligations contained in these Terms of Reference.