Gov’t starts monthly report on Petroleum production, revenues

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The Ministry of Finance on Monday began publishing monthly reports on the Natural Resources Fund (NRF) recording petroleum production and revenues earned.

“The regular publication of the [report] will allow for greater transparency in this new sector of the economy, ensuring that the public is fully aware of the amount of petroleum being produced and revenues being generated. Such transparency is important, given the magnitude of revenues that will be generated from this resource,” the Finance Ministry said in an introduction to the report released on Monday.

The first report was published on the Ministry’s website and covers December 2019. Guyana began producing oil from its Liza Phase 1 project on the Stabroek Block on December 20, 2019.

The country did not earn any revenue in the first month of production as the Ministry said the volume available for lifting was less than the standard cargo size of 1,000,000 barrels. As such, all petroleum produced in December was allocated to profit oil.

“Since no petroleum was sold in December 2019, all petroleum produced in that month was allocated to profit oil, of which the government will be entitled to half,” the report stated.

Production of oil was reported to be 427,282 barrels for December 2019.

Of the 427,282 barrels produced, a total of 3,202 barrels were used for facility fill, which includes the oil that remains in the various piping before the cargo tanks. It is estimated that an additional 1,020 barrels will remain in the hose and piping between cargo tanks and the offloading hose point at the completion of the first lift.

A further 282,000 barrels of oil produced in December 2019 was used for ballast in the cargo tanks.  “These operational volumes will remain on the FPSO facility and in the piping until production from Liza Destiny has ceased,” the Finance Ministry’s report explained.

A total of 163,673 barrels were available to be lifted in 2019, the report disclosed. The Government is entitled to half of the production net of losses and operations (PALO) 92,633 barrels plus the onboard inventory, which amounts to BBL i.e. 1/2*(142,081) + 21,592.

The combined entitlement of the Contractors at the end of December 2019 was 71,040 barrels.

According to the report, the Government will receive its 2 per cent royalty in cash from the Contractor’s share of profit oil 30 days after the end of the first quarter of 2020.

The NRF Act passed in January 2019 stipulates that the Government should publish several reports including those from the Public Accountability and Oversight, Macroeconomic and Investment Committees, reports on withdrawals from the NRF to be included in the annual budget proposals, annual reports of the NRF including audited financial statements and quarterly and monthly reports on the Fund.

The Natural Resources Fund is being kept at the New York Federal Reserve Bank. 

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