The balance of Guyana’s Natural Resource Fund (NRF) was US$2.94 billion at the close of August, with the government recently estimating it will close the year at US$3.15 billion.
The administration has revised its projection of revenue from oil production this year to over US$2.65 billion, up from US$2.4 billion at the start of the year. This is on account of higher-than-expected production and strong oil prices. The oil sector’s performance has driven up growth projections for the national economy from 34.3% to 42.3%.
In the first eight months of 2024, the Fund received revenue for sales of 16 million-barrel lifts of crude, amounting to approximately US$1.32 billion. Nearly US$1 billion more is expected in the last four months of the year, representing payments for 11 lifts at an average price of US$88 million.
The government upped, from 25 to 27, the estimate of oil lifts it will receive this year.
With three quarterly royalty payments already made this year, the final payment is expected in October. By the government’s new estimation, the payment is likely to be approximately US$90 million. The government expects royalties this year to sum up to US$353.8 million.
Given the higher expected oil revenue to the government, more will be available to spend in 2025. Using government estimates from the beginning of the year, the Fund’s withdrawal rule would allow US$2.309 billion to be taken out in support of the 2025 budget. However, this jumped to US$2.531 billion with the government’s most recent estimates—nearly US$1 billion more than the US$1.586 billion approved for withdrawal this year. The withdrawal will amount to 96% of this year’s deposits. The withdrawal rule ties withdrawals to receipts from the preceding year, ensuring savings from prior years are untouched. Following approval of the 2025 withdrawal, savings from 2024 and prior years are expected to amount to more than US$600 million.
Total withdrawals for 2024 up to August were US$850 million. Another US$736 million is expected to be withdrawn during the remainder of the year.
All revenue from oil sales and royalties are derived from crude oil production at the Stabroek Block. ExxonMobil, the operator, has a 45% stake, alongside Hess (30%) and CNOOC (25%).
Guyana’s Oil Ledger offers analyses of the latest oil production data and government oil fund receipts, published typically on a fortnightly basis. The column is authored by Kemol King, a journalist specializing in Guyana’s oil and gas sector.
