– final withdrawal for 2023 from US$1B parliamentary approved allocation
The People’s Progressive Party/Civic (PPP/C) Government has made its eighth and final withdrawal from the Natural Resource Fund (NRF) for 2023, this time withdrawing over US$150 million to finance projects under the 2023 budget.
Making this announcement was the Ministry of Finance, which explained that US$152.1 million (equivalent to G$31.6 billion) was withdrawn on December 27, 2023, from the NRF and transferred to the Consolidated Fund in accordance with the NRF Act (2021) and the approved Budget 2023.
Finance Minister, Dr Ashni Singh
“This transfer brings the accumulated withdrawals for 2023 to US$1.002 billion (equivalent to G$208.4 billion), in line with the total of US$1.002 billion (equivalent to G$208.9 billion) approved to be withdrawn in 2023.”
It was pointed out by the Ministry that Parliament has already approved the withdrawal of US$1 billion from the NRF. With a total of eight withdrawals made last year, this means that the December 27 withdrawal has exhausted the approved allocation.
“It would be recalled in 2021, the Government amended the Natural Resource Fund (NRF) Act to bring greater transparency and accountability in the management of Guyana’s oil resources, including the requirement of the Government to seek annual parliamentary approval for withdrawals from the NRF as stated in Section 19 of the NRF Act 2021.”
“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its consideration of the Budget Process, the Parliament approved US$1.002 billion (equivalent to G$208.9 billion) to be withdrawn from the NRF in 2023,” the Ministry further pointed.
Back in November, the Government had made its sixth and seventh withdrawals (both US$100 million respectively) from the NRF. Then, in September, the Government reported its fifth withdrawal from the NRF, totalling G$10.4 billion (equivalent to US$50 million).
It was also announced that in August and September 2023, 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 last year.
The funds from the NRF have their origins in the Stabroek Block – the only block currently producing oil. The Block is 6.6 million acres (26,800 square kilometres). Exxon, through its local affiliate Esso Exploration and Production Guyana Ltd (EEPGL), is the operator and holds 45 per cent interest in the block. Hess Guyana Exploration Ltd holds 30 per cent interest and CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of CNOOC Limited, holds the remaining 25 per cent interest.
The company is currently undertaking four production projects – Liza 1, Liza 2, Payara, and Yellowtail – in the oil-rich block. It is estimated that when the Yellowtail development project comes on stream, production will climb to 810,000 barrels per day (bpd) by 2027. The US oil major anticipates at least six floating production, storage and offloading (FPSO) vessels in operation by 2030.
Section 3 (1) of the NRF Act 2021, Act No 19 of 2021, which was assented to by President Dr Irfaan Ali on December 30, 2021, establishes the NRF to manage the natural resource wealth of Guyana for the present and future benefit of the people effectively and efficiently and in accordance with the principles of good governance, transparency, accountability, and international best practices, including the Santiago Principles.
Section 5 (1) of the Act provides for a Board of Directors of the Fund comprising not less than three and not more than five members, who shall be appointed by the President, inclusive of a Chairperson. In accordance with Section 5 (2), these Directors are to be selected from persons who have wide experience in legal, financial, business, or administrative matters, one of whom shall be nominated by the National Assembly and one of whom shall be a representative of the private sector.
The Public Accountability and Oversight Committee is chaired by former Commissioner General of the Guyana Revenue Authority (GRA), Clement Sealey. The other six members are Wendell Jeffrey, Abu Zaman, Ryan Alexander, Dawn Gardener, Teni Housty, and Aslim Singh.
The Investment Committee follows a makeup of seven members who will advise the NRF Board on matters that concern investing the oil funds, in a way that maximises the benefits to Guyana.
Chairperson Shaleeza Shaw was sworn in with members Michael Monroe and Richard Rambarran.
