— with close to US$600M in NRF as country receives final oil lift for the year
ALTHOUGH oil prices have dipped because of a new COVID-19 variant which was detected in South Africa, Brent – the benchmark Guyana uses to sell its crude – still remains over US$70 per barrel of oil, giving Guyana an opportunity to end the year with over US$600 million in its Natural Resource Fund (NRF).
Revenues reaching close to US$70 million could be earned from the sale of the country’s final oil lift for this year, which was completed by the company producing offshore Guyana, ExxonMobil, a few days ago.
Minister of Natural Resources, Vickram Bharrat, confirmed on Sunday that the country received its final lift and it will soon be exported.
Even amid the fluctuations in market prices caused by the global response to the new COVID-19 variant, Bharrat is hopeful that oil prices will hold so that Guyana could get the best price for its commodity.
Guyana had earned close to US$80 million from the sale of its penultimate lift for 2021, taking the total earnings in the NRF to over US$534 million.
According to the Bank of Guyana’s monthly report on the NRF, the aggregate sum moved from US$436,132,855.53 in September to US$534,016,987.03 in October.
This is as a result of the country earning G$16,757,920,000 from “profit oil” and G$3,647,083,000 (approximately US$17 million) in royalties from ExxonMobil.
Guyana 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 another US$46 million as proceeds from the sale of its third million-barrel of crude, and US$49.3 million from its fourth oil lift.
?Further, the country, in March, earned US$61 million from the sale of its fifth oil lift, and an additional US$60 million from the sale of its sixth lift, before closing September with close to US$80 million from its seventh lift.
A report compiled by the Inter-American Development Bank (IDB) early this year shows that earnings from Guyana’s oil and gas sector could reach US$31 billion (roughly G$6.7 trillion) by 2035.
Guyana could begin facilitating up to 50 oil lifts per year at one million barrels per lift, thereby producing 50 million barrels of oil annually.
These increased lifts, Minister Bharrat had indicated, are possible with the intended arrival and operation of three additional Floating Production Storage and Offloading (FPSO) vessels. Those include the Liza Unity, which is expected to arrive in November; the Prosperity FPSO which is currently under construction; and the Yellowtail FPSO which is slated to come on stream by 2026.
Further, with crude prices hovering at US$80 a barrel, Guyana would earn as much as US$4,000,000,000 (GYD$836,902,800,000) each year for its 50 oil lifts.
“So, when you crunch the numbers, 50 lifts at a million barrels, and based on the oil price today, if it continues along that trend, you can see or get an idea of the direct proceeds coming to Guyana,” Minister Bharrat said in a recent interview with OilNow.
He also reminded that the aforementioned earnings are outside of other benefits such as royalties, which could see a mammoth increase in the country’s overall oil earnings. “We are not even talking royalties yet,” Minister Bharrat related.