…in second payment for oil and gas

GUYANA has received its second payment of oil and gas royalties from gross production at a total of US$3,698,152.63. The sum joins the country’s first payment of US$4.9M received on April 30, 2020 for a total of US$8.6M.
In an invited interview with the Guyana Chronicle on Thursday, Minister of Finance, Winston Jordan, confirmed that the payments were received on schedule on July 30 and have been deposited in the Natural Resource Fund (NRF) account opened with the Federal Reserve Bank of New York.

The payments are collectively for April, May and June and averages around GYD$771,713,056 in consolidated total or approximately GYD$64,309,421 a month.

Though royalties are calculated on a monthly basis, Article 15.6 of the Petroleum Agreement specifies that the monies be transferred to the government quarterly, 30 days after the end of each calendar quarter. With the first payment made on April 30, this meant that the next was expected on July 30 while the third is now expected on October 30.

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.

This second payment of royalties will be added to the over US$90M Guyana already has in its NRF. The sum comes from Guyana’s first million-barrel of crude sold on February 19, 2020, raking in nearly US$55M; the second million-barrel sale at US$35M; the first payment of royalties at US$4.9M and interest from monies in the bank.

Minister Jordan was pleased to note that: “All the citizens of Guyana can track the deposits and the amount in the account. In accordance to the law, the citizens will also be able to check the spending whenever that takes place.”

Jordan 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.

He has also previously noted that Guyana can begin to use these resources to address critical areas of need as soon as a new Parliament begins.

Meanwhile, Guyana is expected to make its third million-barrel crude lift in the first week of August. This third lift of Guyana’s share of crude will mark the final for Shell Western Supply and Trading Limited under its contract to purchase Guyana’s first three cargoes.