State coffers received $12.2B from ExxonMobil in 2019

Liza Destiny

ExxonMobil’s local subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), contributed over $12 billion to the State coffers in revenue during the 2019 fiscal year, by far the greatest contributing company, according to the latest report published by the Extractive Industries Transparency Initiative (EITI) Guyana.

The report notes that the $12.2 billion in revenue from EEPGL represents a 74 per cent increase in just one year. EEPGL’s contribution to the extractive sector revenues in 2018 was $7 billion.

EEPGL’s 2019 contribution accounted for 18 per cent of Guyana’s total extractive revenues for the year.

Coming in at second was Canadian mining company Guyana Goldfields Incorporated, which contributed $2.8 billion. This was a three per cent increase from the previous year. Pharsalus Gold Incorporated in collaboration with Australian mining company Troy Resources Guyana, came in third with $1.7 billion in extractive industry revenue, representing a 19 per cent increase.

Bosai Minerals Group Guyana meanwhile came in fourth with $843.3 million, a sizeable increase from 2018, when the Bauxite company contributed $21.8 million. The fifth company was gold company Adamantium Goldings, which was recorded as contributing $502.9 million.

Other extractive industry companies, combined, contributed $50.1 billion for 2019. GYEITI noted that all of the revenues were collected and reported by a number of different agencies, including the Guyana Revenue Authority (GRA), the Guyana Forestry Commission (GFC) and the Ministry of Finance.

An estimated $68.3 billion in revenues was earned by the Guyana Government from its extractive sectors in 2019. This is a significant increase from 2018 when some $27.6 billion was generated.

A further breakdown shows that of the $68.3 billion earned, $43.3 billion or 63 per cent came from the oil and gas sector. The mining sector accounted for $23 billion or 34 per cent while the forestry and fisheries sectors represented 1 per cent, respectively.

In 2018, the oil and gas sector contributed $7.5 billion or 27 per cent while the mining sector contributed $18.2 billion or 66 per cent to the $27.6 billion in total earned for that year. Forestry and fisheries contributed 5 per cent and 2 per cent, respectively.

Since ExxonMobil found crude in commercial quantities offshore in 2015, there have been 31 oil finds to date in the Stabroek Block and an estimated recoverable resource of over 10 billion oil-equivalent barrels. ExxonMobil began producing oil on December 20, 2019, in the Stabroek Block.

The Natural Resources Fund (NRF), where Guyana’s direct earnings from ExxonMobil’s oil production are banked, has already received inflows for at least 10 oil lifts since the oil company started production in the Liza 1 Development. This figure also includes interest earned. It had been announced that the fund had a $150 billion closing balance at the end of March 2022.

Pursuant to Section 16 of the NRF Act 2021, US$200 million (or GY$41.7 billion) was transferred from the NRF to the Consolidated Fund last month, to finance national development priorities.

Revenues from the extractive sectors must be reported to and documented by the GYEITI National Secretariat within the Ministry of Natural Resources. The Secretariat operates under the supervision of the GYEITI MSG and is tasked with carrying out the day-to-day administrative and operational functions for the EITI implementation in the country.

The EITI is a global Standard to promote open and accountable management of natural resources. It seeks to strengthen Government and company systems, inform public debates, and enhance trust. In each implementing country, it is supported by a Multi-Stakeholder Steering Group (MSG), which comprises Government agencies, extractive companies and civil society organisations working together.

Work on the 2019 report commenced in October 2021 shortly after the appointment of the new MSG on September 20, 2021. As a result of the time lost awaiting the new MSG, Guyana had applied for a five-month extension of the deadline for the report’s completion.