Guyana’s Natural Resource Fund received US$1.38 billion (GY$288.35 billion) in revenue from oil sales and royalties in the first half of 2024. This amounted to approximately US$7.6 million (GY$1.58 billion) per day.
Payments were included for 15 million-barrel lifts of crude oil. Two were sold in December 2023, with payments received in January and February of 2024. The 13 other lifts were produced and sold in 2024. Oil sales deposits totaled US$1.22 billion in the first half of the year.
The royalties were paid for production from the last quarter of 2023 and the first quarter of 2024, amounting to US$162.42 million. This represents 2% of crude produced and sold during those quarters.
Revenue is derived from crude oil production at the Stabroek Block. Three oil developments produced more than 113 million barrels of crude in the first six months of 2024, averaging 623,000 barrels per day (b/d). The Yellowtail project is expected to achieve first oil in 2025, boosting production capacity to about 900,000 b/d.
The Bank of Guyana said that the NRF, as of the end of June, has received US$4.26 billion (GY$888 billion) from 52 lifts of profit oil and US$600 million (GY$125 billion) in royalties since production began.
The fiscal terms of Guyana’s production sharing agreement with ExxonMobil, Hess and CNOOC grant the government an initial share of 14.5% of the value derived from production. As the companies recoup their expenses, Guyana’s share is expected to increase significantly.
Guyana is spending US$1.586 billion from the Fund this year, and is expected to spend more than US$2 billion more in 2025.
Vice President Bharrat Jagdeo has been clear about the government’s strategy for utilizing this significant influx of funds. The focus is primarily on capital spending rather than recurrent expenses.
Jagdeo explained the preference for spending on major projects that provide long-term benefits. “When you build a bridge across the Demerara River, it’s built. In the future years, that comes out [of] your budget,” he said. This means that once a major project is completed, it no longer requires continuous funding, freeing up future budgets for other needs.
In contrast, the government prefers to exercise more caution in increasing recurrent expenses like salaries for public sector workers. “A lot of oil-producing countries make the mistake where they grow their recurrent budget and that is why if prices fall they’re stuck with the high cost and the loss of welfare. We have studied this carefully over the years and that is why we are not making the mistakes that they’re making.”
