According to the Finance Ministry, Guyana is expected to receive over US$1,268,706 in royalty for the first quarter of 2020. This was explained in its latest report on the Stabroek Block. In that document, the Ministry said that there were no transfers to the Natural Resource Fund (NRF) for January since the Government did not lift its share of profit oil in that month.
Additionally, there were no royalty payments due in January 2020 as no petroleum was produced and sold in the previous quarter. The Ministry did note however that ExxonMobil did lift crude for January while noting that the Government is entitled to a royalty of two percent of all crude produced and sold in January 2020. This the Ministry said amounts to 20,506 barrels of crude.
The Guyana Standard understands that the cashbased value of the royalty will be determined using the average fair market price of a barrel of crude for January 2020, calculated in accordance with Article 13 of the Petroleum Agreement for the Stabroek Block. At the time of the report’s release today, the Government and the Contractor, ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL),were still finalising the procedures to give effect to Article 13 of the Agreement. However, based on the current draft of the procedure, the average fair market price of crude for January 2020 would be US$61.87 per barrel.
Using this price, the Ministry said that the value of the royalty for January 2020 would be US$1,268,706. However, while royalties are estimated on a monthly basis, Article 15.6 of the Stabroek Block Petroleum Agreement stipulates that the monies will be transferred to the Government quarterly, thirty (30) days after the end of each calendar quarter. As such, the royalty payments for January, February and March 2020 will be transferred to the NRF by April 30, 2020. By that time, the royalty received would be well over US$3M.