Since the inauguration of the Liza Phase One Project in 2019, followed by Liza Phase Two in 2022, the nation has seen an unprecedented inflow of funds. To date, these projects have funneled a staggering US$3 billion (GY$627.7 billion) into Guyana’s coffers.
This immense financial windfall, broken down into profit oil earnings and royalties, has been steadily accumulating in the Natural Resource Fund (NRF) from March 2020 to September 2023, as documented by the Bank of Guyana’s latest report. A meticulous breakdown reveals that US$2.7B has come from 33 lifts of profit oil, complemented by US$385.36 million from royalties, culminating in a total of US$3.1 billion.
In a revealing quarter-to-quarter comparison, the Central Bank’s report highlighted that the Fund accounted for inflows amounting to US$379.71 million. This comprised profit oil – US$325.27 million and royalties – US$54.44 million. Central Bank’s report said lower levels of profit oil and higher amount of royalties were recorded for this quarter in comparison to US$385.69 million and US$53.26 million respectively for the previous quarter.
The lower level of profit oil this quarter was due to the receipt of funds for fewer lifts, specifically four in comparison with five lifts the previous quarter even though oil prices increased in the quarter. These funds were deposited into the Natural Resource Fund account held at the Federal Reserve Bank of New York.
During the quarter, Guyana Standard understands that the Federal Reserve also moved its interest rates target range from 5% – 5.25% to 5.25% – 5.50%. As a result of these increases, the Fund earned US$24.20 million in interest income over the quarter compared to US$19.94 million the previous quarter.
Additionally, the Board of Directors of the Natural Resource Fund at its meeting held on June 26, 2023 approved the updated investment mandate for the Fund. It was mandated that the funds be maintained in the deposit account held at the Federal Reserve Bank of New York earning overnight deposit interest at the prevailing federal funds rate of 5.30%. It was also agreed that the Bank of Guyana will continue to monitor the overnight interest rate and inform the Board of any changes by the Federal Reserve Bank to consider redeploying cash.
While production at the Liza Phase One and Liza Phase Two Projects in the ExxonMobil-operated Stabroek Block carry an average production of 400,000 barrels of oil per day, this is expected to increase by 220,000 barrels once the Prosperity vessel comes on stream later this year. The Prosperity floating, production, storage and offloading vessel will serve the Payara Project pegged at US$9B.
