The Guyana government can withdraw 96% of its 2024 earnings from the oil sector, based on the withdrawal rule in the Natural Resource Fund Act.
The rule allows the government to withdraw US$2.46 billion of the US$2.57 billion deposited into the fund last year. The money will contribute to Guyana’s 2025 budget, which will be presented today, January 17 by the Senior Minister in the Office of the President with responsibility for Finance and the Public Service, Dr. Ashni Singh.
Vice President Bharrat Jagdeo has said the government would not necessarily always withdraw up to the rule’s ceiling, but that such a decision would be based on an assessment of the circumstances at the time. The 2025 budget is expected to be another infrastructure-heavy one, with major appropriations in support of housing developments and associated works, energy expansion, transport infrastructure, schools, and hospitals
Since spending from the oil fund began in 2022, the government has always sought the maximum allowed by law, even altering the rule in 2024 to withdraw more. The rule applies progressively smaller percentages to sequential US tiers, starting with 100% of the first US$1 billion and decreasing to 10% for amounts exceeding US$5 billion. It applies only to deposits from the preceding year, safeguarding savings from prior years.
The National Assembly will once again debate the government’s national budget, as it has in previous years. Following this debate, the House will vote on whether to approve the withdrawal from the Fund. If approved, the funds will be transferred to the Consolidated Fund, which serves as the government’s main bank account. The money will then be withdrawn in multiple tranches over the course of the year.
The Guyana government started spending oil revenue in 2022 after overhauling the NRF legislation to simplify the withdrawal rules and add a board of directors. Since spending began, it has increased annually by an average of 60%, quadrupling from US$607 million in 2022 to the estimated US$2.463 billion this year. All revenue deposited into the NRF is from oil sales and royalties derived from crude production at the ExxonMobil-operated Stabroek Block. Demonstrated production capacity is approximately 660,000 barrels per day (b/d).
