Guyana earned $126.3B in oil revenue in 1st quarter of 2024

A sum of $126.3 billion (US$604.3 million) has been earned by Guyana in the first quarter of 2024, based on the receipt of oil payments into the Natural Resource Fund (NRF) which shows that the majority of this money came from oil profits.
These payments would also mark the first full quarter to include payments from the Prosperity Floating Production Storage and Offloading (FPSO) vessel, Guyana’s third FPSO, which only started up production in November of last year.
According to a gazette notice, the first profit oil payment of the year (January 2, 2024), came from the lift of 1 million barrels of oil from the Liza Unity FPSO in December 2023. This payment amounted to $15.3 Billion (US$73.5 million).
The second payment, recorded on January 29, 2024, was a royalty payment of US$63.5 million that is related to oil production in the last quarter of 2023. A February 2 profit oil payment amounting to US$76.5 million was also recorded, this time from the Liza Destiny FPSO.
The Prosperity FPSO meanwhile accounts for two profit oil payments- a February 2, 2024 payment of US$73.1 Million and a March 8 payment of US$78.3 Million. Meanwhile, the Liza Destiny FPSO would account for only one other payment, a March 25, 2024 payment of US$82.1 Million.
The Liza Unity, which started up production in 2022 and has since ramped up production to 250,000 barrels of oil per day, on its part, accounted for two other lifts- a February 15 transaction that amounted to US$75.3 million and a March 6 transaction for US$81.6 million.
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 that Government seek annual parliamentary approval for withdrawals from the NRF as stated in Section 19 of the NRF Act 2021.
The funds in the NRF, which are being held in an account at the Federal Reserve Bank of New York, have their origins in the oil-rich Stabroek Block offshore Guyana, where US oil major ExxonMobil and its partners – Hess Corporation and CNOOC – are producing light sweet crude using the Liza Destiny, Liza Unity, and more recently, the Prosperity FPSO vessels.
In February, the Guyana Government tabled a bill that sought to significantly increase the withdrawal amounts from the NRF.
Senior Minister with responsibility for Finance, Dr Ashni Singh presented the Fiscal Enactments (Amendment) Bill 2024 – a bill that intitules an act to amend the NRF Act, among other legislation.
Under the new withdrawal formula in the proposed legislation, the Government plans to draw down 100 per cent of the first US$1 billion deposited into the Fund in the immediately preceding fiscal year; then 95 per cent of the second US$1 billion; followed by 90 per cent of the third US$1 billion; and 85 per cent of the fourth US$1 billion.
This proposed withdrawal formula is significantly higher than the figures that were catered for in the current 2021 NRF Bill. That NRF formula allows the withdrawal of 100 per cent for the first US$500 million; 75 per cent for the second US$500 million; 50 per cent for the third US500 million; 25 per cent for the fourth US$500 million; 5 per cent for the fifth US$500 million; and 3 per cent on the excess for the first US$2.5 billion.
Earlier this year, Vice President Bharrat Jagdeo had assured that Government would continue to invest the oil revenues in areas which develop the productive capacity of the country and its people, and once there is stabilisation, monies would be funnelled into savings.
He was responding to a recent CNBC documentary, drawing contentions that the Natural Resource Fund (NRF) was not enough to keep the resource curse at bay.
However, Jagdeo had pointed out that it was contradictory to save the country’s oil money in the early days of production while the population was suffering from inequalities that could be remedied with investments. It was also affirmed that Guyana’s NRF was not a slush fund, but a formula-based mechanism to determine how much is spent.