While the sales terms have not been publicised, Guyana received nearly US$80 million for its last one million barrels of oil, the highest sum to date, and pushing the total in its account at the New York Federal Reserve Bank to more than US$430 million, sources say.
“The account has seen a deposit of [US]$79.6 million for the last oil sales and a [US]$12 million in royalties,” a source told the Sunday Stabroek.
Using Brent crude oil estimates, it would have meant that this country received a little more than US$79 per barrel on the last million barrels lift.
The US$79 million along with the US$12 million in royalties would bring the total in the account to approximately $436 million.
Government has been largely silent on the oil sales and the arrangement for this country’s profit share as per the agreement it has with ExxonMobil and partners for the Liza-1 development in the Stabroek Block.
Stabroek News has for weeks been trying to access information on how many oil lifts of one million barrels each Guyana has received, how many more are scheduled for 2021, the current marketer and the terms for marketing the oil, and other general information on the oil and gas sector. A number of calls were made and emails dispatched to Ministry of Natural Resources officials and Minister of Natural Resources Vickram Bharrat to no avail.
Vice President Bharrat Jagdeo has said that government has nothing to hide and will be transparent in all oil and gas-related matters. He has suggested that the Ministry of Natural Resources set up a portal for the publishing of real-time information but that initiative has not been taken up and it is unclear how the media would be able to access the information.
This country had to learn through a Twitter statement that the last 1 million barrels of oil was lifted by the Indian Oil Corporation last month. Before that, the last reported lift was on April 13, 2021, of 998,645 barrels of oil from the Liza Destiny. Its value was pegged at US$62,617,616.23.
The current July shipment is expected to reach India on August 6. This is an important step in diversification of crude sourcing for India and a possible future roadmap for India’s energy requirements, according to a Twitter post by the Indian High Commission here.
On June 30, Reuters reported that the Indian Oil Corp, the country’s top refiner, had made its first purchase of Guyana’s Liza-1 light sweet crude as it seeks to diversify its crude purchases.
On Tuesday, bids will be opened at the National Procurement and Tender Administration Board from prospective marketers of Guyana’s oil share from the Liza-1 well. On July 14, a pre-bid meeting with 20 prospective bidders from around the world was held.
‘Operationalising’
Meanwhile, with oil monies in the New York account growing, the government here is still to say when measures would be put in place for the operationalizing of the Natural Resource Fund (NRF), which the World Bank has said should be done as soon as possible.
“The early operationalisation of the NRF is essential to address any potential challenges posed by the sudden influx of significant export and fiscal revenues,” the World Bank had said in response to questions from the Sunday Stabroek.
The Natural Resource Fund legislation has not yet been activated and observers have pointed to the seeming sloth with which the PPP/C administration is moving to see the critical piece of legislation enacted despite being in office for one year.
The World Bank has said that its Guyana Petroleum Resources Governance and Management Project supports the Government of Guyana’s efforts to develop and introduce an effective and transparent management system for public finances, ahead of expected petroleum sector revenues.
It has noted that that component includes “the design and implementation of an Integrated Financial Management System that aims for more effective management over public finances, enhanced transparency and accountability, and support for the urgently needed operationalization of the Natural Resource Fund.”
Under the project, according to the World Bank, it has been working with the government to deploy international specialists on governance of the petroleum sector to deliver advisory support and on-the-job training. “This activity aims to build long-term capacity for the Government of Guyana to independently manage, regulate, and oversee the oil and gas sector. The establishment, staffing and operation of Guyana’s Petroleum Commission is an essential element of this capacity building effort.”
Shortly after President Irfaan Ali had established his Cabinet in August last year, Minister of Natural Resources, Bharrat had said that petroleum legislation was high on the government’s agenda. He had especially singled out the Petroleum Commission Bill and the Natural Resources Fund Act as two pieces of legislation to be addressed swiftly. Neither of these two pieces of legislation has been proceeded with.
