By Navendra Seoraj

GUYANA having received payment of US$49.3 million for its fourth oil lift, has ended the year on a high note with approximately US$200 million being generated so far from the country’s nascent oil and gas sector.

The nation, new to the oil-and-gas sector, sold its first one million barrels of crude on February 19, 2020, raking in nearly US$55 million. In its second million-barrel sale, the country received US$35 million and US$46 million as proceeds from the sale of its third million-barrel of crude.

Along with those deposits and the US$12.9 million in royalties and interest, Guyana has close to US$200 million in its Natural Resources Fund (NRF), at the U.S. Federal Reserve Bank.

Under the Production Sharing Agreement (PSA), Guyana receives two per cent royalty and 50 per cent profit oil, which is what remains after the producer recovers their production cost.

The country’s most recent payment was delayed because ExxonMobil- the company producing oil offshore Guyana- had taken a decision to limit oil production after encountering challenges with the gas handling system on the Liza Destiny Floating Production Storage and Offloading (FPSO) earlier this year.

This resulted in production hovering below the peak 120,000 barrels per day mark for several months. Guyana’s next payment is anticipated in February 2021. A special evaluation team of local and foreign experts, appointed by the government, are examining tenders to ensure that Guyana has the best-suited company to market the country’s oil.

Vice-President, Bharrat Jagdeo had said no money from the fund will be used until the government amends or repeals the existing NRF Act. The government had committed to addressing important issues of transparency and ensuring systems and institutions are in place before those funds are utilised.

Sections of the media also reported President Irfaan Ali as saying Guyana’s oil revenue will remain untouched until a series of reforms are enacted to strengthen the Government’s regulatory infrastructure for the oil and gas sector.

“My government is focused heavily on transparency and accountability. As you know, we have demonstrated this after the negotiations of the licence for the Payara. Not only did we make the agreement public, but we also made the environmental permit public, so nothing is done in secrecy.
“I’ve said before, there’ll be an arm’s length relationship with the politicians. We had international experts leading those negotiations and discussions,” the Head of State said.