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Finance Ministry says no oil money received in December

Feb 18, 2020 News

– Royalty to come at the end of first quarter

The Ministry of Finance confirmed yesterday that Guyana received no revenues in the month of December for its oil resources since the production up to the end of that month was less than the standard cargo size of one million barrels.
This was explained in the Finance Ministry’s first report on Petroleum Production and Revenues (RPPR). In the document that it released yesterday, the Ministry explained that the Liza Destiny FPSO facility began producing oil on December 20, 2019. Before the start of production, there was an onboard inventory of 21,592 barrels (BBL) of Marine Gas Oil (MGO) and Intermediate Fuel Oil (IFO). This was the remaining fuel that was loaded to power the FPSO facility for the journey from Singapore and for the commissioning of subsea risers and flowlines.
The report further noted that the production of oil was reported to be 427,282 BBL for December 2019, or 35,607 Barrels of Oil Per Day (BOPD). Of the 427,282 BBL produced, the Finance Ministry said that a total of 3,202 BBL were used for facility fill, which includes the oil that remains in the various piping before the cargo tanks. It is estimated that an additional 1,020 BBL will remain in the hose and piping between cargo tanks and the offloading hose point at the completion of the first lift.
Kaieteur News understands that during December 2019, no oil was lifted from Liza Destiny since the volume available for lifting, i.e. 163,673 BBL, was less than the standard cargo size of 1,000,000 BBL.
Since no petroleum was sold in December 2019, all petroleum produced in that month was allocated to profit oil, half of which the government will be entitled to plus the onboard inventory, which amounts to 92,633 BBL (i.e. 1/2*(142,081) + 21,592).
Since the government did not lift its December 2019 entitlement, the Finance Ministry said that this amount is credited to an (Over)/Under Lift account which keeps track of all barrels of crude owed to parties. The combined entitlement of the Contractor at the end of December 2019 was 71,040 BBL.
The Finance Ministry also said it should be noted that since government has elected to receive its two percent royalty in cash, this amount will be paid from the Contractor’s share of profit oil. As per Article 15.6 of the Petroleum Agreement for the Stabroek Block, the royalty cash payment for a calendar quarter will be made to government 30 days after the end of that quarter.

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