In addition to the almost US$55M that has already been deposited into the Natural Resource Fund (NRF) account held by the Bank of Guyana at the Federal Reserve Bank of New York, royalty payments are expected to begin this week. These sums represent Guyana’s share of profit oil plus royalty to date, based on production at the Liza Phase 1 Development.
The Ministry of Finance said last week that Shell Western Supply and Trading Limited, the company that was contracted to lift Guyana’s first three cargoes, deposited US$54,927,994.80 into the NRF account on March 11, as payment for the country’s first lift of 1 million barrels of oil in February 2020.
While royalties are estimated on a monthly basis, Article 15.6 of the Petroleum Agreement stipulates that the monies will be transferred to the Government quarterly – 30 days after the end of each calendar quarter. As such, the royalty payments for January, February and March 2020 will be transferred to the NRF by Thursday. This is expected to be published in the Ministry of Finance’s next report on Petroleum Production and Revenue.
Director of the Department of Energy, Dr. Mark Bynoe had indicated that in addition to the 2 percent royalty and 50 percent profit oil, Guyana will also be receiving withholding taxes, plus the direct and indirect benefits through employment creation and other revenue-generated income from the country’s emerging oil and gas industry.
Oil production began in Guyana last December. The country is entitled to approximately five million barrels of oil this year as part of its profit share from production at the Liza Phase 1 Development.