Guyana’s oil fund worth almost half of country’s annual budget

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Guyana’s Natural Resource Fund (NRF) closed April 2024 with a market value of US$2.634 billion (GY$549 billion), nearly equivalent to half of the country’s US$5.496 billion (GY$1.146 trillion) national budget this year. 

Annual revenues to the government from oil production continue to increase. In the coming years, one year of oil revenues is expected to surpass the value of the country’s annual budget. 

According to a Bank of Guyana report, the fund opened April with approximately US$2.357 billion (GY$491 billion), before receiving deposits of royalties and oil sales amounting to approximately US$265 million (GY$55 billion).

The royalties for crude produced in the first quarter of 2024 amounted to approximately US$99 million (GY$21 billion). Added to the US$63.6 million (approx. GY$13.26 billion) in royalties received for the prior quarter, Guyana has received more than US$162 million of the US$319.91 million in royalties expected this year. 

The oil sales deposits for April amounted to approximately US$167 million (GY$35 billion). Added to the approximately US$540 million in oil sales received in the first quarter, oil sales for the year up to April have amounted to approximately US$707 million of the US$2.08 billion in oil sales expected in 2024. 

According to the Stabroek Block production sharing agreement (PSA) which currently governs all offshore projects producing crude, the ExxonMobil-led consortium managing the projects takes 75% of all crude produced annually to repay its expenses. The government receives 50% of the remainder (called profit oil), which it then sells. The government’s share of the crude is expected to increase after the consortium has substantially recovered its costs. The consortium also pays the government 2% of all crude oil produced and sold. 

In addition to royalties and oil sales, Guyana’s oil fund gained interest income of approximately US$11.6 million (GY$2.4 billion) in April.

No withdrawals were recorded in April. However, the government withdrew US$250 million from the fund in the first quarter to support national development initiatives. The National Assembly had approved US$1.586 billion (approx. GY$330 billion) to be withdrawn from the Fund to support Guyana’s US$5.496 billion (GY$1.146 trillion) national budget. The remaining withdrawals are expected to be executed throughout the year in tranches.

Guyana’s oil fund is held by the New York Federal Reserve Bank.

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