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Guyana receives US$377M from oil in three months
Kaieteur News – The Government of Guyana (GoG) yesterday announced that the Natural Resource Fund (NRF) has received a total of US$377,140,826.94 in oil revenue so far for the year.
Through the Official Gazette dated March 31, 2023, the Ministry of Finance provided the detailed breakdown on the sums received thus far for the petroleum sector.
Five deposits have been made into the Fund for the period January 1, 2023 to March 31, 2023.
On January 3, 2023 a deposit of US$82,612,294.01 was made into the account from profit oil, followed by a second payment on January 23, of US$75,074,493.46.
A royalty payment was also made on January 30, of US$57,591,504.37. This was followed by two profit oil payments on February 16 and March 20 of US$82,248,712.42 and US$79,613,822.68, respectively.
Profit oil receipts are derived from Government’s lifts of crude oil earned as profit whereas royalties are paid on a quarterly basis, 30 days following the end of each calendar quarter.
At the end of February, 2023, the Fund had a closing balance of US$1,379,353,505.59 according to the data provided by the Bank of Guyana. The Bank has not yet updated the balance with the payments received for March.
The NRF legislation, passed in the National Assembly in December 2021 makes it mandatory for deposits to be Fund to be made public.
Even as the resources trickle in, it must be noted that the lopsided ExxonMobil oil contract has been criticized for the abusive provisions in place that allow for more benefits to the contractor.
Citizens have been calling for the deal to be renegotiated to ensure Guyana secures more value for its light sweet crude. Although more than 11 billion barrels of oil has already been discovered offshore in the prolific Stabroek Block operated by Exxon’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), the GoG is refusing to amend the provisions of the contract.
In that contract Guyana has settled for 50 percent profit sharing, after Exxon takes 75 percent of the earnings to clear its expenses.
The deal that the oil company often brags about to its shareholders, also forces Guyanese to pay their share of taxes, amounting to millions of US dollars each year. This figure is likely to further balloon as more operations come on stream.
In addition, the country is allowing ExxonMobil to operate offshore without full liability coverage in the event of an oil spill, which means that the risk is borne by Guyana.
Another key provision that is lacking in the document is ring-fencing provision, which would avoid the oil company from using the petroleum revenue in one field to cover for expenses in another.
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