NRF had $150B closing balance at end of March – BoG report
…Guyana to further earn millions from 12 remaining oil lifts for 2022
The Natural Resource Fund (NRF), which has already received inflows for at least 10 oil lifts since ExxonMobil started production in the Liza 1 Development, as well as interest earned, had a $150 billion closing balance at the end of March 2022.
This is according to the Bank of Guyana, which recently released the first-quarter report on the NRF. In it, it is explained that the fund had a starting balance of $90.9 billion at the start of the 2021 fourth quarter and a balance of $150 billion at the end of the 2022 first quarter.
The Bank also revealed that Guyana is expected to earn millions from 12 crude lifts planned for this year. These lifts, each of which amounts to 1 million barrels of crude, will presumably come from both the Liza 1 and 2 Developments.
As of March 31, 2022, Guyana has received revenue from 10 oil lifts as its share of profit oil. According to the report, this amount includes payment for one crude lift, which has already been received in this quarter.
Saudi Aramco was awarded a 12-month contract to market Guyana’s crude last year. Guyana’s crude lift share was initially marketed by Shell Western, after which Hess International marketed Guyana’s crude.
It was previously revealed by Natural Resources Minister Vickram Bharrat that this month could see as many as two oil lifts being undertaken, with lifts from the Liza Destiny and Liza Unity Floating Production Storage and Offloading (FPSO) vessels potentially crossing paths.
Bharrat had explained in an interview with this publication that Liza Destiny is already scheduled to lift its 1 million barrels of oil in April – its second lift for the year. Meanwhile, the Liza Unity FPSO, which started producing oil in the Liza Phase 2 Development in February of this year, could potentially mark its first oil lift as well.
According to Bharrat, they got approximately US$95 million for the last lift. And with Brent crude prices currently averaging US$120 per barrel, he noted that Guyana could expect to make over US$100 million for each lift, should both lifts from the Liza Destiny and Unity be completed in April.
The historically high oil prices (oil prices have not exceeded US$100 on the global market since 2014), is part of the fallout from Russia’s invasion of Ukraine. It is, however, a double-edged sword where Guyana is concerned. That is because of the sharp rise in oil prices at the local pumps.
Guyana, with US oil giant ExxonMobil as the operator, began producing oil on December 20, 2019, in the Stabroek Block. The first-ever payment of US$54.9 million for an oil lift was received in February 2020.
Since Exxon found crude in commercial quantities offshore in 2015, there have been 28 oil finds to date in the Stabroek Block and an estimated recoverable resource of over 10 billion oil-equivalent barrels.
United States oil giant, ExxonMobil is currently undertaking four production projects Liza 1, Liza 2, Payara and Yellowtail in the oil-rich block. Production capacity is currently at 120,000 barrels per day (bpd) with the Liza Destiny FPSO in operation.
Meanwhile production only recently started in the Liza 2 Development, which is said to produce even lighter crude than Liza 1. It is also estimated that with the Yellowtail Development project on stream, production will climb to 810,000 bpd by 2027. The US oil major anticipates at least six FPSOs producing 1 million bpd by 2030.
The oil rich Stabroek 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.