Guyana Stabroek PSA delivers US$1.4 billion in profit oil and US$218 million in royalties

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From OilNOW | January 22, 2024

Stabroek PSA delivers US$1.4 billion in profit oil and US$218 million in royalties, helping boost Guyana’s budget allocations

Guyana’s Natural Resource Fund (NRF) received a substantial sum of US$1.6 billion in royalties and profit oil revenues for the year 2023, as reported by Senior Minister with responsibility for Finance and the Public Service, Dr. Ashni Singh. This is a result of oil production operations being conducted by ExxonMobil under a Production Sharing Agreement (PSA) that governs the prolific Stabroek Block.

The breakdown of this revenue is notably from two key sources: the Liza Destiny oil production unit contributed approximately US$576.6 million, while the Liza Unity accounted for about US$822.3 million. In addition to these profit oil payments, the NRF also benefited from royalty payments amounting to US$218.1 million. These royalties, which come from the co-venturers in the Stabroek Block, represent 2% of the value of the crude produced and sold.

These revenues are in line with the production output from three offshore projects, which collectively yielded 142.9 million barrels of crude in 2023. As a result of these contributions, the NRF’s total receipts for the year reached $1.617 billion. According to the December report from the Bank of Guyana, the NRF’s net value at the end of 2023 was $1.975 billion, which was slightly less than the Ministry of Finance’s forecast at the beginning of the year.

Also Read: Guyana Budget 2024 set at $1.146 Trillion

The production performance of the three offshore projects varied, with Liza Destiny averaging about 141,000 barrels per day from January to November. The Liza Unity averaged 234,000 barrels per day in the same period. The Prosperity floater, the newest addition to Exxon’s lineup, began production in mid-November 2023 and quickly ramped up to 100,000 barrels per day by the end of that month. Collectively, these projects achieved a production rate of 500,000 barrels per day. Following this, in early January, ExxonMobil announced an increase in production offshore Guyana to 550,000 barrels per day.

This surge in production has led to a 45.9% expansion of the oil sector in 2023. The year’s total production marked a substantial increase from the 101.3 million barrels produced in 2022.

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In 2023, there were a total of 142 lifts of crude oil from the three FPSOs, each lift representing approximately one million barrels. Of these, 17 lifts were allocated to the government, including six from the Liza Destiny and 11 from the Liza Unity. The profit from oil receipts in 2023 corresponds to two lifts from the last quarter of 2022 and 15 government lifts in 2023. Additionally, two receipts related to 2023 are expected in January 2024 for lifts that occurred in December 2023.

Under the current framework of Guyana’s Natural Resource Fund Act, approximately US$1.15 billion of the 2023 inflows are earmarked to support the 2024 national budget. However, the government plans to revise the withdrawal rule in the NRF, aiming to increase the fund’s contribution to the budget. The reason for this change is that the 2024 projected expenses are roughly 47% higher than the 2023 budget.

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