ExxonMobil, partners pocketed US$2.7B, while Guyana collected $753M at half-year - Bank of Guyana Report

ExxonMobil, partners pocketed US$2.7B, while Guyana collected $753M at half-year – Bank of Guyana Report

Sep 12, 2022 News

Kaieteur News – According to Bank of Guyana’s latest report on the health of the economy, ExxonMobil Corporation’s affiliate Esso Exploration and Production Guyana Limited (EEPGL) and its partners in the Stabroek Block recovered US$2,709.2 million in oil cost recovery. This sum covers a portion of their investments made in the oil operations offshore.

This is also in accordance with the Stabroek Block Production Sharing Agreement (PSA) which allows the companies to recover up to 75 percent of costs in a calendar year. During the same reporting period, it was noted that Guyana’s Natural Resource Fund (NRF) totalled G$157,053.56 million (US$753.25 million). The NRF was formed by the enactment of the Natural Resource Fund Act 2019, which was subsequently replaced with a revised version last year. The Act gives the Bank of Guyana the responsibility for the operational management of the Fund.

The Bank had signed an operational agreement with the Ministry of Finance on December 11, 2019, which details the obligations of the financial institution and outlines the management principles. The Bank also signed an agreement with the Reserve Advisory and Management Partnership (RAMP) of the World Bank on September 15, 2019 for RAMP to provide technical support to the management of the Fund over the next three years. The Bank began managing the Fund in the first quarter of 2020.

As at June 30, 2022, there exists no investment mandate for the Fund and all petroleum revenues are held as cash deposits in the Natural Resource Fund account at the Federal Reserve Bank of New York. Furthermore, the revised Natural Resource Fund Act assigns the responsibility for the preparation of the investment mandate to a Board of Directors. According to Bank of Guyana’s Half Year report, the Fund opened the year with G$126.69 billion (US$607.65 million). Over the first half of the year, the Fund received G$64.02 billion (US$307.03 million) from three profit oil payments and G$7.75 billion (US$37.15 million) from 2 royalty payments.

During the first half of 2022, the Federal Reserve increased its target range for the federal funds rate three times with the current range being 1.5% – 1.75%. As a result of these increases, along with higher account balances, the Fund was able to earn a higher amount of interest on overnight deposits. For the first half of 2022, the interest earned amounted to G$297.60 million (US$1.43 million) taking the total amount earned since inception to G$325.09 million (US$1.56 million). Since inception, the sum of G$992.74 thousand (US$4.76 thousand) was received as capital gains on investments.

In May 2022, the first withdrawal from the fund was made. The funds were transferred to the Government of Guyana’s Consolidated Fund account and amounted to G$41,700 million (US$200 million). In 2022, G$126,694.31 million (US$607.65 million) has been budgeted to be withdrawn.

Bank of Guyana

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