Oil sector contributed 35% of $350B in revenue collected by GRA in 2023

…as oil and gas tax contributions grew by 46% in one year

Guyana’s growing oil and gas sector has contributed an impressive 35 per cent of all revenue collected by the Guyana Revenue Authority (GRA) in 2023, with the revised revenue collection standing at $350.3 billion.
According to the Auditor General’s Report for 2023, total revenue collected from taxpayers in the oil and gas sector for that fiscal year was $128 billion, comprising $122.1 billion from internal revenue and $5.9 billion from customs. This represents an increase of $40.2 billion, or 46 per cent, above what was collected in 2022.
A review of the 2022 Auditor General’s Report shows that 28.6 per cent of the gross revenue collected by the GRA for that year had come from oil and gas.
“According to the Authority’s Statements of Receipts and Disbursements, the sum of $320.110 billion was estimated to be collected as revenue for the year 2023. However, this figure was revised by the Authority to $350.346 billion,” the report states. “Actual collections paid into the Consolidated Fund totalled $366.615 billion. This represents a positive variance of $16.269 billion, equivalent to 5 per cent above the revised estimated collections.”
Meanwhile, the report states that $196.5 million in tax exemptions, which were required by contract, were granted to the oil and gas sector during 2023, and Oil and gas companies submitted a total of 123 applications for Value Added Tax (VAT) refunds totalling $10.2 billion
“VAT credits totalling $3.544 billion were disallowed, while approved refunds amounted to $8.854 billion. During 2023, eighteen companies received payments totalling $3.534 billion, while refunds totalling $3.169 billion for seventeen companies were used to offset outstanding tax liabilities,” the report adds.
Since oil was first produced in 2019 in the Liza Phase One project, using the Liza Destiny floating, production, storage and offloading (FPSO) vessel, the addition of further FPSOs have rapidly increased the tax pool available for GRA to receive revenue from.
United States (US) oil giant ExxonMobil, through its local subsidiary Esso Exploration Production Guyana Limited (EEPGL), is the operator of the Stabroek Block, where the oil is being produced, 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 Liza Phases One and Two and Payara Projects, all of which combined are producing over 600,000 barrels of oil per day, account for the three FPSO vessels operating in Guyana’s Stabroek Block in waters offshore.
The increased earnings from taxes in the oil and gas sector can also be linked to the growth of the local content sector, which saw as many as 454 persons being hired within the first half of the year in that sector.
The Local Content Secretariat of the Natural Resources Ministry has said that, with these figures, well over 50 per cent of the target for oil and gas new hires has already been reached for 2024.
In December 2021, the National Assembly passed the Local Content Act which outlines 40 different service areas that oil and gas companies and their subcontractors must procure for Guyanese and Guyanese-owned companies. These include 90 per cent of office space rental and accommodation services; 90 per cent of janitorial, laundry and catering services; 95 per cent of pest control services; 100 per cent of local insurance services; 75 per cent of local supply of food; and 90 per cent of local accounting services.
The Local Content Act mandates penalties such as fines ranging from $5 million to $50 million for oil and gas companies and their sub-contractors who fail to meet the minimum targets of the legislation, as well as those who are in breach of the Act. (G3)