The Natural Resource Fund (NRF) which will serve as the depository for Guyana’s oil earnings has been set up at the New York Federal Reserve Bank.
Buyers of Guyana’s oil, the first shipment of which was lifted last week, will make their deposits to that account, according to a report by the News Room.
The NRF, established by the Natural Resource Fund Act 2019, will manage the earnings for the sustainable development of the country. Additionally, under the Act, the Bank of Guyana has been charged with the operational management of the NFR which will see its inflows made in American dollars.
“…fairly transfer natural resource wealth across generations to ensure that future generations benefit from natural resource wealth.”– The Natural Resource Fund Act 2019
The objectives of the Fund, as laid out in the NRF Act, are to:
The Ministry of Finance will provide general oversight and is responsible for the overall management of the NRF. This means that the Ministry will prepare and submit requests for withdrawals to the National Assembly as part of budgetary proposals.
According to the International Forum of Sovereign Wealth Funds, the only other withdrawals permitted from the NRF is in the event of a “major natural disaster” which would then require a supplemental Bill be presented to the National Assembly for approval. “This Bill must include a detailed account of why the emergency withdrawal is necessary and how the monies will be used to ameliorate the effects of the disaster.”
Oil was first discovered in Guyana in May 2015 by ExxonMobil which initiated exploration in 2008. Since then, there have been 17 oil finds in Guyana so far.
The first shipment of one million barrels of crude oil was lifted from the country last weekend when the tanker Yannis P arrived to remove the resource from the Stabroek Block offshore the country.