The February 2023 balance for Guyana’s Natural Resource Fund (NRF) account has increased to $287.6 billion (US$1.4 billion). This was noted in Bank of Guyana’s latest monthly report for the account which sits in the New York Federal Reserve Bank.
The financial regulator said the balance includes revenues from the State’s first 2023 sale of one million barrels of oil. This sale saw the collection of $17.1B last month. Interest earned on the account is now up to $1 billion. No royalties were collected in February. There was also a withdrawal of $41.7B (US$200M) which forms part of the US$1B approved to support the 2023 budget.
The Natural Resource Fund Act was enacted in 2019 to establish the Natural Resource Fund (Fund) which exists to help authorities manage the nation’s natural resource wealth in an efficient and effective manner. It also serves to ensure the efficient financing of national development priorities, including initiatives aimed at achieving an inclusive green economy.
The law also empowers the Minister of Finance with the overall management of the Fund, including preparing the Fund’s Investment Mandate. The act establishes an Investment Committee, a Macroeconomic Committee, and a Senior Investment Adviser and Analyst to support the Minister in management of the Fund.
The Bank of Guyana is responsible for operational management of the Fund.
A Public Accountability and Oversight Committee was also established to ensure that the Fund is managed transparently and to provide an independent assessment of withdrawals from the Fund. Deposits into the Fund are intended to come from Guyana’s petroleum revenues, including from royalties, the government’s share of profits, and signature bonuses, among others.
Oil production in Guyana commenced in December 2019 and Guyana became an oil-exporting nation in 2020. The oil reserves of Guyana are estimated at nearly 11 billion barrels (1.75 billion cubic meters [m3]) of oil equivalent resource with still unexplored and potentially undiscovered additional reserves.
In 2019, the Bureau of Statistics anticipated that the oil and gas sector would increase Guyana’s Gross Domestic Product (GDP) up to 13 times, and the GYD will appreciate in value against the USD once daily production reaches 1 million barrels per day (160,000 m3 per day).