Govt makes additional withdrawal of $20.8B from oil fund

– withdrawals for 2023 total US$850M

The People’s Progressive Party/Civic (PPP/C) Government has withdrawn an additional US$100 million from the Natural Resource Fund (NRF), making it the seventh such transfer for the year so far.
The withdrawal was made on November 23, 2023, to finance the Government’s developmental projects.
This was announced by the Finance Ministry in a statement reminding that since the NRF Act was implemented in 2021, it now includes the requirement for the Government to seek parliamentary approval for any withdrawals.
“Pursuant to that provision, as part of its consideration of the Budget Process, the Parliament approved US$1.002 billion (equivalent to G$208.9 billion) to be withdrawn from the NRF in 2023.

The Federal Reserve Bank of New York

“In accordance with the NRF Act 2021 and the approved Budget 2023, the Government of Guyana has made its seventh transfer, totalling US$100 million (equivalent to G$20.8 billion) from the NRF on November 23, 2023, to the Consolidated Fund,” the Ministry said.
With this withdrawal, it means that approximately US$850 million (G$176.8 billion) has been withdrawn from the Fund for the year. This would leave US$150 million (G$32 billion) remaining to be withdrawn for 2023.
It was only earlier this month that the Guyana Government made its sixth withdrawal from the NRF to the tune of more than $20 billion, to finance its aggressive national development priorities.
Back in December 2021, the Government amended the NRF Act to bring greater transparency and accountability in the management of Guyana’s oil resources, including the requirement for the Government to seek annual parliamentary approval for withdrawals from the NRF as stated in Section 19 of the NRF Act 2021.
The PPP/C Administration had previously said it would continue to work aggressively through “sound and transformative investments of oil resources” from the NRF by utilising these funds in a clear and transparent manner to the benefit of present and future generations of Guyana.
Only in September, the Government reported its fifth withdrawal from the NRF, totalling G$10.4 billion (equivalent to US$50 million).
Earlier that month, it was announced that in August and September, amounts totalling US$200 million or G$41.6 billion had been transferred from the NRF to the Consolidated Fund to finance national development priorities.
These withdrawals followed another US$400 million or G$83.2 billion being taken out of the NRF in February and May of this year.
The funds in the NRF have their origins in the oil-rich Stabroek Block offshore Guyana, where United States oil major ExxonMobil and its partners are producing light sweet crude using the <<<Liza Destiny>>> and <<<Liza Unity>>> Floating Production, Storage and Offloading (FPSO) vessels.
Last year was the first time Guyana had used oil funds to finance a national budget. In fact, in 2022, the Government withdrew a total of $126 billion (US$607.6 million) in three tranches from the NRF which went towards financing Guyana’s national development plans.
This year’s $781.9 billion budget was financed for the first time by both oil and climate funds, earned from selling Guyana’s high-quality carbon credits to Hess Corporation. Since the passage of the NRF Act in 2021, the Guyana Government has gone on to establish the Natural Resource Fund Board.
In January of this year, the Bank of Guyana signed an agreement to officially hand over control of the NRF to the Board of Directors appointed by the President.
According to Section 5 (6d) of the Act, the Board is required to enter into an operational agreement with the Bank, so that management of the Fund can change hands. This agreement was signed two days after the reading of the 2023 Budget.
The NRF Board is chaired by Major General (Retired) Joe Singh. Other members of the Board are Guyana’s Permanent Representative to the United Nations, Carolyn Rodrigues-Birkett; Private Sector Executive Ramesh Dookhoo; former People’s National Congress (PNC) parliamentarian Dunstan Barrow; and former Chancellor of the University of Guyana, Professor Compton Bourne.
In August, Chairman Singh submitted the first NRF Report for 2022 in which he indicated that the NRF Secretariat is slated to be established in the second half of this year. With the establishment of the Secretariat, he noted that the operational needs of the Board would be met. (Jarryl Bryan)