Guyana gets US$46m more in oil money

With an average payment of about US$46 per barrel of oil, Guyana this week received US$46M for its third 1M barrels of oil entitlement and this reflects an increase of more than US$10 dollars per barrel than it received on its last lift.

The total amount US$46,046,937 was deposited into its Sovereign Wealth Fund being held in a United States Bank of America account, Minister of Natural Resources Vickram Bharrat  yesterday told Stabroek News.

“It is good price given when we look at the hit the global oil market has taken from the effects of the coronavirus pandemic. We were also paid faster,” he said.

This lift brings an end to the contract this country has with Shell Western Supply and Trading Limited which had been contracted to sell the first three lifts of 1M barrels each.

A new tender was recently advertised for an oil marketer for one year and the evaluation and award of that contract should be completed by November when this country is due for its 4th lift.

Reeling from the effects of the global coronavirus pandemic that had brought the oil industry into a glut and saw the registering of a negative value for the first time in history, this country got US$35 million for the second of the five lifts of one million barrels of oil in June. The current revenue represented about US$20 million less than what it received for its first cargo in March when it obtained US$55M.  

The Ministry of Finance had said that the total holdings of the Natural Resources Fund as at June 11, 2020 was US$94,921,803.00 representing both royalty and oil sale amounts but announced earlier this month that the second payment for royalties, US$3,698,152.63, had also been deposited. 

Bharrat said that over US$150M is now in the oil account.

A sequence of payments is shown in the table below but does not reflect the interest figures generated to date as this newspaper is still awaiting those.

Royalties are calculated monthly and paid 30 days after every quarter of the year. The country’s third royalty payment is expected in October.

Guyana is entitled to five cargoes or five million barrels of oil this year as part of its profit share agreement with ExxonMobil and its partners, in addition to the 2 per cent royalty on all production in the Stabroek Block.

According to Article 11.2 of the Petroleum Agreement for the Stabroek Block, in any month during which crude is produced and sold, a maximum of 75 per cent of crude produced net of losses and operations can be allocated to permissible recoverable costs incurred by the contractor. This volume of crude is referred to as cost oil. The remaining crude is referred to as profit oil and is to be split equally between the contractor and government.

The Department of Energy is responsible for overseeing the sale of the country’s share of oil and it has sold the first three cargoes to Shell Western Supply and Trading Limited and is now looking for a marketer for the other cargoes.