–transfers estimated to be US$1.2B annually

THE government is projecting that the Natural Resources Fund (NRF) will have a balance of at least US$5.4 billion (G$1.144 trillion) by the end of 2026, given the current proven oil reserves, expected production and oil prices projections.

However, the actual balance of the Fund in 2026 could end up being much more given the further ramping up of production based on additional exploration activity currently ongoing.

This was according to Senior Minister with responsibility for Finance, Dr. Ashni Singh, during a presentation at the 2023 International Energy Conference and Expo, on Thursday.

“Cumulatively, by end of 2026, total deposits into the NRF will total US$10.7 billion, total withdrawals of the fund US$5.3 billion, leaving a balance of just under US$5.5 billion,” Dr. Singh said.

He added: “This is based on current projections of production, oil prices assumption, and does not take account of further ramping up of production based on additional exploration activity. It is also based on projected transfer using the current transfer formula built into the NRF Act. Based on the current formula, in the medium term withdrawals will be US$1.2 billion annually.”
Guyana currently has 11 billion barrels of proven oil reserves discovered offshore in the Stabroek Block, which is being operated by the Esso Exploration and Production Guyana Limited (EEPGL) owned by ExxonMobil and its partners Hess and CNOOC. However, exploration continues in a number of fields.

The company currently has four sanctioned projects offshore Guyana. Of those, Liza Phase One is producing approximately 140,000 bpd, using the Liza Destiny floating production storage and offloading (FPSO) vessel, while the Liza Phase Two, is at capacity of 220,000 bpd, using the Liza Unity FPSO vessel.

The third project, Payara, is expected to produce 220,000 bpd using the Prosperity FPSO which is scheduled to begin later this year. The fourth project, Yellowtail, is expected to produce 250,000 bpd with production expected to begin in 2025 using the ONE GUYANA FPSO.

However, Dr. Singh cautioned, that though US$5.4 billion is a very significant sum of money in historic Guyanese context, it is by no means a staggering sum of money, and it is not until after 2026 that Guyana will truly begin to truly accumulate a significant balance.

“I have always been conscious and mindful of emphasising a disabuse of the impression that the NRF will be accumulating a staggering amount of money. As production ramps up further beyond 2026, as we get up to one million barrels of oil per day and beyond, deposits into the fund will grow commensurately as will the balance,” Dr. Singh related.