The Natural Resource Fund, established to receive revenues from oil sales and royalties, has received more than US$1.24 billion since first oil in December 2019.
This scale of revenue flow is significant for Guyana, since from this single sector, these revenues are almost equivalent to half of the country’s 2022 budget which Finance Minister, Dr. Ashni Singh, presented at US$2.65 billion (GY$552.9 billion) in January.
Of the amount received into the Fund, the government has withdrawn approximately US$400 million to support Guyana’s infrastructure-heavy 2022 budget. The withdrawal was done in two US$200 million tranches. The National Assembly approved the withdrawal of approximately US$607 million from the Fund in February. So, the government is expected to withdraw the remaining approved balance before the year is out.
In July alone, the Fund earned GY$10.646 billion in royalties and GY$50.127 billion in profit oil, totaling approximately GY$60.773 billion (US$291.477 million).
As a result of the withdrawal of the second tranche in July and the deposits made into the Fund, its balance as at July 31 is GY$176.3 billion (US$845.6 million). This includes profit oil revenues, royalties, and interest.
It took Guyana a little over 2.5 years to receive US$1.2 billion from oil, but with production increases, Guyana’s annual take will be a lot more. The Liza Phase 1 project had been the lone producing project at 120,000 barrels per day (b/d) up until earlier this year. Optimisation work increased its production capacity to 140,000 b/d and the coming onstream of Liza Phase 2 tripled production levels to a peak of approximately 365,000 b/d. This, paired with high oil prices experienced for much of 2022, is expected to earn Guyana more than US$1 billion this year alone.
Budget 2022, as presented at the start of the year, indicated an estimate of about US$957 million from oil. But this was before Russia invaded Ukraine and the price of crude shot up to and was sustained well over US$100 a barrel for months. As a result, Guyana’s projected economic growth for 2022 shot up 10 percentage points from 47.5% to 57.8%.
Guyana can expect even more in annual revenues as new projects come online. Payara in 2023 will take production levels to 580,000 barrels per day. Yellowtail in 2025 will make Guyana the world’s largest per capita producer.
While new projects will increase Guyana’s annual revenues, the country’s share of oil production will increase after ExxonMobil and its partners recover the funds spent exploring and developing the Stabroek Block.
ExxonMobil, the operator, plans to have six producing vessels offshore Guyana by 2027, with total capacity exceeding 1.2 million barrels per day. Further ahead, the operator envisions 10 producing vessels operating the Stabroek Block.