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Gov’t used up half of US$5.4B collected to date from oil production
Bank of Guyana (Gov’t used up half of US$5.4B collected to date from oil production)
Kaieteur News – The Government of Guyana (GoG) has withdrawn half of the country’s total earnings to date from oil and gas production.
According to the 2024 third quarter report for the Natural Resource Fund (NRF), published by the Bank of Guyana (BoG), the country has so far received a total of US$5.4B. Guyana began producing oil in December 2019 and received its first oil payment on March 11, 2020.
Following the passage of the NRF Act in 2021, the GoG in 2022 plugged US$607.6 million in oil money into the National Budget for first time. This was followed by another US$1B in budgetary support for the year 2023.
This year, the National Assembly has approved US$1,586,150,331 to be deducted from the Fund to support the country’s national development priorities. So far, four withdrawals from the NRF have been made from the oil account for the year totaling just over US$1.1B.
In accordance with the provisions of the 2016 Petroleum Agreement Guyana signed with ExxonMobil back in 2016, the country receives a meager 2% royalty on its sweet light crude while the contractor is not required to pay taxes.
The country also receives a paltry share of profits, only 12.5% after ExxonMobil takes 75% each month to recover its investments in the Stabroek Block. Guyana’s total share from its resource is therefore 14.5% while the oil companies enjoy 85.5%.
It should be noted that after Guyana repays the Co-Venturers for their investments in the Stabroek Block, the country will be able to benefit from a higher share of revenue.
As at the end of December 2023, ExxonMobil reported that a total of US$30B was invested into the Stabroek Block operations. President of ExxonMobil Guyana, Alistair Routledge also told reporters at a media conference earlier this year that US$19B of those expenses has so far been cleared through the cost recovery mechanism.
It should be noted that Guyana currently has three oil projects producing oil.
The Liza One, Liza Two, and Payara projects collectively carry a price tag of about US$19B. The country could have been receiving higher profits this year from the three projects; however, in the absence of ring-fencing, Exxon will use the revenue to invest in other developments and even fund its exploration programme.
ExxonMobil affiliate ExxonMobil Guyana Limited is the operator and holds 45% interest in the Stabroek block. Hess Guyana Exploration Ltd. holds 30% interest, and CNOOC Petroleum Guyana Limited holds 25% interest.
(Gov’t used up half of US$5.4B collected to date from oil production)
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