Traditional sectors keeping economy afloat – Min Bharrat

…as Govt yet to tap in on oil revenues

Government has not spent a single cent from the direct oil proceeds that Guyana has received through the sale of its crude, since the commencement of production in 2019.
This was announced by Natural Resources Minister Vickram Bharrat during a recent engagement where he outlined that the traditional sectors have been keeping the country’s economy afloat, despite the windfall of revenues earned from its prolific oil boom.
“Mining has kept our economy going over the last five to six years, especially at a time when all the other sectors have been failing. Mining has been keeping Guyana’s economy afloat, especially too since we haven’t used any of the almost $350 million [US] oil revenue that we would have collected so far from the sale of our crude. Not a single dollar has been used from that direct oil proceeds,” the Minister reassured.
Guyana, with US oil giant ExxonMobil as the operator, began producing oil back in December 2019, in the Stabroek Block. Guyana’s oil revenue is kept in the New York Federal Reserve Bank, where it is earning interest.
In March 2021, the Natural Resources Ministry had disclosed that a total of 5,009,797 barrels of oil worth US$246.5 million have been shipped. This sum, added to the royalties the country receives, took the total in the Natural Resource Fund (NRF) account to US$267.6 million.
And considering earnings from the sixth lift in April and royalty payments, this amount is expected to have climbed to over US$300 million.

Guyana received its first payment of US$54.9 million for an oil lift dated February 19, 2020. The second lift, on May 21, 2020, was valued at US$35 million; while the third lift, which occurred on August 9, 2020, was worth US$46 million.
The fourth lift of oil offshore Guyana occurred on December 9, 2020, and came in at US$49.4 million in value. And on February 5, 2021, some 997,420 barrels of oil were lifted from Liza Destiny. A sum of US$61 million was paid for that lift.
This month, international news agency Reuters had reported that Indian Oil Corp (IOC) has purchased one million barrels of crude oil from Guyana. The oil, which comes from the Liza-1 field, left Guyana’s shores on July 4 on a Greek tanker for India’s Paradip port and will arrive around August 8. Guyana is expected to rake in another US$75 million from that lift.
IOC is a State-owned oil and gas company headquartered in Mumbai, India, and administered under the Ministry of Petroleum and Natural Gas. According to Reuters, this shipment of oil is a trial cargo.
While IOC is the first Indian State entity to buy oil from Guyana, it was preceded by HPCL-Mittal Energy Limited, a joint venture between State-run Hindustan Petroleum Corp and Indian steel tycoon LN Mittal.
Last year, Guyana had received 29 bids from companies interested in marketing the country’s crude.
Vice President Bharrat Jagdeo subsequently revealed that 28 of these companies were disqualified owing to “nonsensical” bid requirements, even though these companies have proven track records in marketing crude and are trading billions of barrels per day.
In June, ExxonMobil has made its 20th discovery of oil offshore Guyana, finding 70 metres (230 feet) of high-quality oil reservoirs while conducting drilling at its Longtail-3 well in the Stabroek Block.
ExxonMobil has said it anticipated that at least six projects offshore Guyana would be online by 2027. The oil major has established an ambitious oil exploration plan for 2021 offshore Guyana.
The Stabroek Block covers 6.6 million acres (26,800 square kilometres). EEPGL, Exxon’s local subsidiary, is the operator and holds a 45 per-cent stake 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.