Even though oil production commenced on December 20 from the Stabroek Block, the government has confirmed that no revenues for that period were received since lifts were conducted only from January onwards. Specifically making this known was the Finance Ministry in a report titled, “Petroleum Production and Revenues (RPPR).” (See link for the report: https://finance.gov.gy/publications/report-on-petroleum-production-and-revenues-december-2019/)
The Finance Ministry further clarified that the government earned no petroleum revenues, hence no deposits were made to the Natural Resource Fund (NRF).
Expounding on this issue, the Ministry said that during December 2019, no oil was lifted from Liza Destiny since the volume available for lifting, 163,673 barrels, was less than the standard cargo size of 1,000,000 barrels. The Ministry said that all petroleum produced in that month was allocated to profit oil, of which the government will be entitled to half plus the onboard inventory, bringing the total to 92,633 barrels. With respect to the onboard inventory, the Ministry said that the Liza Destiny had 21,592 barrels of Marine Gas Oil (MGO) and Intermediate Fuel Oil (IFO) before the start of production. This was the remaining fuel that was loaded to power the FPSO facility for the journey from Singapore and for the commissioning of subsea risers and flowlines.
Since the government did not lift its December 2019 entitlement, the Ministry said that this amount is credited to an (Over)/Under Lift account which keeps track of all barrels of crude owed to parties. The combined entitlement of the Contractor at the end of December 2019 was 71,040 barrels.
The Ministry was keen to note that since government has elected to receive its two percent royalty in cash, this amount will be paid from the Contractor’s share of profit oil. As per Article 15.6 of the Petroleum Agreement for the Stabroek Block, the royalty cash payment for a calendar quarter will be made to government 30 days after the end of that quarter.
ExxonMobil would have collected its first entitlement in January. It therefore means Guyana will more than likely collect its first royalty after the General and Regional Elections are held in March.
