Guyana receives almost US$55M for one million barrels of oil sold

Mar 20, 2020 News

– Payment already placed into Natural Resource Fund – Central Bank

By Kiana Wilburg

Central Bank’s Senior Officials confirmed yesterday that Guyana’s Natural Resource Fund “is all set” and already in receipt of the nation’s first oil payment from Shell Western Supply and Trading Limited (SWSTL), which is based in Barbados.

Finance Minister, Winston Jordan

The officials declined to reveal how much Guyana received, but noted that the payment was deposited earlier this week into the account which is being held at the Federal Reserve Bank of New York.
When contacted for further details, Finance Minister Winston Jordan promptly disclosed that Guyana received almost US$55M for the first million barrels of oil which was sold to SWSTL.
It was in mid-February that local authorities witnessed the transfer of Guyana’s first million-barrel lift of crude onto the oil tanker Cap Philippe which was chartered by Shell. It had bought, in total, Guyana’s first three million barrels of crude from the Liza Phase One Project.
Energy Department Head, Dr. Mark Bynoe had told this newspaper in a previous interview that Guyana is entitled to at least five million barrels of oil for 2020.
According to the Energy Department, the subsidiary of Shell, which is the third-largest company in the world based on 2018 revenues, won the bid on account of a number of factors. These included a competitive pricing that limits the Government’s exposure to market uncertainty; the size, scale and global reach of its trading operations; the company’s high level of integration between Upstream, Trading and Downstream; Shell’s strong foothold in the Latin American markets and the size and scale of their shipping and storage operations in the region, allowing for multiple options on the Liza crude commercialization; and the range of new grades Shell recently introduced into the market.
The Department also took into consideration Shell’s willingness to share critical refinery information which it asserts Guyana needs, in order to understand the Liza crude behaviour.
Kaieteur News was also informed via a statement from the department that Shell’s readiness to support it in operating these cargoes, while it is strengthening its structures and in-house crude commercialization human resources, was also a determining factor.
CENTRAL BANK’S ROLE
According to a Memorandum of Understanding (MoU) that was signed last year, Central Bank is tasked with the role of being the Operational Manager of the Natural Resource Fund. The MoU notes that Bank of Guyana has several responsibilities which include receiving and accounting for all deposits into the NRF; investing the NRF in eligible asset classes; appointing private managers and custodians; and reporting on the performance of the NRF on a monthly, quarterly and annual basis.
It also outlines that Central Bank will have to implement management systems, procedures and risk management arrangements in accordance with international standards; and provide the public with information on the NRF as required by law; among others.

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