Guyana sells last million barrels of oil for 2021 through Aramco
- Dip in expected oil revenues possible
Guyana received its final cargo of oil for this year- one million barrels- last week and the country is marketing its share of the oil produced offshore through Aramco Trading Limited, a unit of the Saudi Arabian oil company.
“The last lift was completed a few days ago,” Minister of Natural Resources Vickram Bharrat told the News Room on Monday.
As per the Production Sharing Agreement (PSA) Guyana has with the local subsidiary of ExxonMobil- Esso Exploration and Production Guyana Limited (EEPGL), Guyana receives two per cent royalty and 50 per cent of the profit oil (that is, the oil that remains after the producers recover the cost of production).
With this final lift for 2021, Guyana would have received a total of nine million barrels of oil since oil production started in December 2019; five million barrels were marketed this year alone. This oil is being produced in the Stabroek block offshore Guyana.
Minister Bharrat told the News Room that Guyana’s oil is being marketed through Aramco, after the local authorities granted a 12-month contract for marketing the government’s share of oil to the company.
Guyana currently has about US$534 million (approximately GY $112 billion) in its Natural Resource Fund (NRF) kept in the New York Federal Reserve Bank. With the sale of this final oil for the year, Bharrat said that the fund could increase to over US$600 million.
The money in that fund remains untouched as the local authorities are working to amend the Natural Resource Fund (NRF) Act before the end of this year.
Through the sale of the previous lift, in October, Guyana received US$80.4 million. But, oil prices have dipped over the past few days due to the emergence of the new variant of the novel coronavirus, Omicron.
When asked if Guyana could expect lower revenues from the sale of this one million barrels of oil, Minister Bharrat stated that this is a possibility because of the lower prices per barrel of oil.
“…(the price of oil) was over US$80 (per barrel) a few days ago, but today it is over US$75 or US$76, so there may be a little difference in what we expected,” he explained.
The Brent Crude is the international benchmark for oil prices and is used by Guyana. As of midday Monday, the price for Brent Crude was at US$74.61.
On Friday, when concerns over the new Omicron variant swelled, Reuters reported that oil prices plunged about US$10 a barrel; this is the largest one-day drop since April 2020.