THE Ministry of Finance’s monthly report on the Natural Resource Fund (NRF) shows that the revenue from Guyana’s first earnings of oil-and-gas royalties from gross production to date has been deposited in the U.S. Federal Reserve Bank.

The total royalties received by Guyana for the first quarter of 2020 was US$4,909,505.30 and this sum now joins the previous US$54,927,994.80 deposited in the NRF from the sale of Guyana’s first million barrels of crude to Shell Western Supply and Trading Limited. There is now a total of US$59,855,083.44 in the account.

According to a release from the Ministry of Finance, the account was credited with the royalty payment on April 30, 2020. It stated that during this quarter, approximately 5,029,301 barrels were produced and sold from the Stabroek Block, and no crude oil produced during this period was used for fuel or transportation.

In keeping with Article 15.6 of the Petroleum Agreement for the Stabroek Block, Guyana was entitled to two per cent of this quantity. The US$4.9 million received by Guyana for the first quarter averages around GY$1,040,815,123.60 in consolidated total or approximately GY$346,938,000 a month.

Under the Production Sharing Agreement (PSA) governing the Stabroek Block, Guyana will be receiving at a minimum two per cent royalty on all oil produced in the Block, plus 12.5 per cent profit oil. As the capital and operating costs are liquidated, Guyana’s share of profit oil will increase.

Finance Minister Winston Jordan stated that he is pleased that there can be no distrust about whether these finances are being managed well as the Ministry of Finance, and government by extension, has remained transparent in its dealings.

“Everything has been to the book, by the book and transparent and accountable. All the monies that we have earned so far, as people can see, is going into the account and they can see the interest being earned,” he told the Guyana Chronicle in a previous interview.

As of May 21, Guyana officially lifted its second million-barrel of crude from the Liza Destiny Floating Production Storage and Offloading (FPSO) vessel and payment for this shipment is expected within in the first week of June.

Guyana became an oil-producing nation on December 20, 2019 and, anticipating the same, the government set up a Sovereign Wealth Fund (SWF) – also known as the NRF — to safeguard against the resource curse and to ensure that petroleum revenues benefit both current and future generations.

The government has committed to managing the fund in accordance with international best practices outlined in the Santiago Principles.