According to the Natural Resource Fund (NRF) legislation, all petroleum revenues would be paid into an account at the US Federal Reserve Bank. But these revenues do not only speak to royalties and the Government’s share of profit oil or gas. It will also hold several forms of bonuses and profits that would accrue from any National Oil Company established in the future.
The law which was scrutinized by the Guyana Standard today, states that any signature bonus, discovery bonus, production bonus or other bonus related to production operations or the award of a petroleum licence would be deposited into the Fund.
Interestingly, it also notes that any capital gains tax levied on companies or individuals undertaking production operations would be placed into the Fund. While the Act makes this provision, it would not apply to the ExxonMobil deal for the Stabroek Block which allows for the operator and its affiliates!to be exempted from this tax. Also, the rigid stabilization clause in the deal will insulate it from being affected by this provision when it is implemented by the authorities in the future.
It was further noted in the law that any tax levied on the net property of companies or individuals undertaking production operations would make its way into the NRF.
While the legislation does state that excess money from the forestry and mining sector would go towards the NRF, the law does not make this an absolute necessity as it states that “the Minister may deposit” same into the account.
It was outlined that value-added tax collected on inputs or outputs on production operations; customs duties collected on inputs into production operations; applicable statutory fees collected by regulatory agencies; and withholding tax on payments made to contractors by companies or individuals undertaking production operations will not be considered as part of petroleum revenue and will, therefore, not be included in the Fund.
The overall management of the Fund will be handled by the Minister of Finance.