Third notification made to Parliament of all petroleum revenues paid into the NRF
-in keeping with Government’s commitment to transparency and accountability in the management of Guyana’s oil resources
Senior Finance Minister Dr Ashni Singh today presented Notification Receipts to the National Assembly of all petroleum revenues paid into the Natural Resource Fund (NRF) during the period 1st July 2022 to 30th September 2022, pursuant to Section 33 (2) of the NRF Act 2021. This notification was published in the Official Gazette on the 17th October, 2022 and continues to reinforce the PPP/C Government’s commitment to transparency and accountability in the management of Guyana’s oil resources. As at end of September 2022, the Natural Resource Fund balance amounted to US$1 billion.
It would be recalled that one of the key amendments in the NRF Act 2021 was strengthening the governance architecture of the Fund through the establishment of a Board of Directors tasked with the overall management of the Fund, reviewing and approving the policies of the Fund and monitoring its performance; thereby separating the management of the Fund from the Minister responsible for Finance. In addition, a 9-member Public Accountability and Oversight Committee (PAOC), responsible for providing non-governmental oversight of the operations of the Fund, replaced the cumbersome 22-member committee previously proposed. The Board of Directors and PAOC members were appointed in August 2022.
The International Monetary Fund (IMF) recently released its 2022 Article IV mission to Guyana in May-June of this year, commending the PPP/C Government on the amendments made to the NRF Act and highlighted:
“The NRF Act was strengthened recently. After a thorough review, and while restraining the spending of the oil receipts, the authorities amended the NRF Act in December 2021. The recent amendments set clear ceilings on withdrawals from the Fund for budgetary spending …’
Vice President Dr. Bharrat Jagdeo recently announced new fiscal terms as part of an updated model Production Sharing Agreement (PSA) for all new contracts. Fourteen (14) oil blocks have been identified and will be auctioned for the nation’s first-ever competitive offshore oil and gas licensing round. As part of this new model agreement, the royalty has been increased from the meagre 2 percent granted to the Stabroek Block under the former APNU+AFC regime to an impressive 10 percent. The current 75 percent cost recovery ceiling has been lowered to 65 percent. Profit sharing after cost recovery remains the currently applied 50/50 system between the contractor and the Government of Guyana. These new terms would double Guyana’s share from 14.5 percent to 27.5 percent, alongside the newly introduced 10 percent corporate tax.
The PPP/C Government will continue to manage Guyana’s oil resources in a clear and transparent manner, to the benefit of present and future generations