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Guyana’s oil account now holds over US$1B – Central Bank Report
Kaieteur News – Bank of Guyana disclosed yesterday that the Natural Resource Fund’s (NRF) closing balance at the end of September 2022 stood at US$1,051,214,827.86.
Specifically for the third quarter, Central Bank said inflows to the Fund amounted to G$102.8B (US$493.18 million) comprising of profit oil – G$92.2B (US$442.12 million) and royalties – G$10.6B (US$51.06 million).
These funds were deposited into the Natural Resource Fund Account held at the Federal Reserve Bank of New York.
As a result of an additional FPSO, that is to say the Liza Unity being in operation, more lifts were made and hence, more profit oil was received compared to previous quarters.
Since its inception, the bank said that the Fund has received G$269.3B (US$1.3B ) from 16 lifts of profit oil and G$31.9B (US$153.12 million) from royalties.
Over the quarter, Central Bank said the Federal Reserve increased its target range for the federal funds rate twice moving it from 1.5% – 1.75% to 2.25% – 2.5% and then again to 3% – 3.25%. As a result of these increases which caused interest rates on overnight deposits to rise significantly, and a higher account balance, the Fund continued to earn a higher level of interest income on its overnight deposits than previous quarters. Kaieteur News understands that the Fund earned G$995.75 million (US$4.78 million) in interest income over the quarter compared to G$266.04 million (US$1.28 million) the previous quarter.
WITHDRAWALS
During the third quarter, Central Bank noted that transfers to the Government of Guyana’s Consolidated Fund account amounted to G$41,700 million (US$200 million).
The institution said this amount represents 32.91% of the total amount budgeted to be withdrawn in 2022 – G$126.7B (US$607.65 million). In 2022, a total of G$83.4B (US$400 million) was transferred from the Fund, amounting to 65.83% of the budgeted amount.
VALUE & MANDATE
Central Bank also disclosed that the market value of the Fund at September 30, 2022 stood at G$219.2B (US$1,051.21 million), an increase of 39.56% (G$62,124.73 million / US$297.96 million) from the previous quarter.
To date, there has been no investment mandate for the Fund and all petroleum revenues are held as cash deposits in the Natural Resource Fund account.
A revised Natural Resource Fund Act was passed in the National Assembly and assented to by the president on December 30, 2021. This revised Act assigns the responsibility for the preparation of the investment mandate to a Board of Directors.
Since 2015, more than 35 discoveries have been made offshore Guyana. Thirty-two (32) of those discoveries were made at the Stabroek block, two at the Orinduik block, 1 at the Kanuku block and 1 at the Corentyne block. Of these, 2 new discoveries were made during the quarter – both in the Stabroek block.
In the Stabroek block, the Liza Phase 1 Development began production in late 2019 and reached its peak capacity of 120,000 barrels per day (bpd) in December 2020.
Production from Liza Phase 2 began in February 2022 and is expected to reach its capacity of 220,000 bpd later this year. On September 30, 2020, the government of Guyana announced their approval of the Payara Offshore Development Project. With an estimated resource base of approximately 600 million oil-equivalent barrels, production of up to 220,000 bpd is expected to begin in 2024.
Plans are in order for ExxonMobil’s 4th project – the Yellowtail Development project – which is expected to start production of 250,000 bpd in 2025 taking Guyana to a production level of 810,000 bpd. It is projected that by 2027, six to seven projects will be in operation and by the end of the decade, Guyana’s oil production will increase to more than 1 million bpd.
The Stabroek Block is estimated to contain resources of approximately 11 billion oil equivalent barrels and is operated by ExxonMobil affiliate Esso Exploration and Production Guyana Limited. They hold a 45% interest in the block, Hess Guyana Exploration Ltd. holds 30% interest while CNOOC Petroleum Guyana Limited holds the remaining 25%.
During this quarter, Guyana received revenue for four lifts of one-million-barrel (approximate) oil cargoes as its share of profit oil, taking the number received for 2022 to seven.
It is expected that revenue from an additional six oil cargoes will be obtained this year resulting in an annual total of thirteen.
As at September 30, 2022 Guyana received revenue for sixteen lifts since the inception of the Fund.
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