Guyana saves US$800 million from oil earnings since production began

Last Updated on Saturday, 13 January 2024, 10:43 by Denis Chabrol

Guyana has saved just over US$800 million from more than US$3 billion in oil revenues since production began in 2020, even as the country is set to sell 27 entitled lifts this year now that production has begun at the Payara project, officials said.

After government’s total withdrawals of US$1.002 billion in 2023 from the Natural Resource Fund (NRF) based on the legally entrenched formula, a senior government official estimated that Guyana has saved almost US$500 million. “At the end of 2023, the government will be entitled to their share for spending, we should as of the end of 2023 just over US$800 million which will be put aside,” the official said.

The withdrawals were transferred to the Consolidated Fund for budgeted capital projects and programmes.

The official said that in 2022 Guyana saved US$269 million which earned almost US$13 million in interest. An official said all of the money deposited in the NRF in the United State Federal Reserve has been earning about 5 percent from overnight deposit.

The official explained that as part of the 2024 budget, Guyana would withdraw its entitled amount from the NRF. “We will have a good amount that is now starting. Remember that we have done better than the years before and as they start (more production), more and more will be added to that savings for the future,” he said.

Guyana earned US$3,057,571,695.52 including US$385,357,766.82 in royalties from its entitled lifts of oil between 2020 and the end of the last quarter of 2023.  In 2023, Guyana was entitled to 17 lifts.

Officials said Guyana is forecast to earn much more from its crude sales this year as the country is this year entitled to 27 lifts with the coming on stream of the Payara project.

ExxonMobil has said the Payara project, which began production on November 14, is currently producing more than 180,000 barrels of oil per day. It is on track to reach its initial production capacity of 220,000 barrels per day during the first quarter.  The company said total production from the first three Stabroek block projects is currently over 550,000 barrels per day and expected to reach more than 600,000 barrels per day later this year.

Projections are that around 2027 or 2028, Guyana will produce 1.2 million to 1.5 million barrels per day with six Floating Production, Storage and Offloading vessels.