Guyana’s First Oil-Dependent Budget—Exxon Drills Oil and Guyana Digs a Fiscal Hole

The new revenues contribute to a substantial increase in the size of the budget. [...] The transfer this year from the NRF to the 2022 budget is the entire amount that Guyana has received from start-up oil production at the Liza Destiny site from December 2019 through the end of 2021. [...] Initially, the government had agreed that in any year, the amount of increased spending would not exceed the amount of the oil revenue received. [...] According to the IMF, Guyanese officials agreed initially to constrain annual spending to avoid exceeding the amount transferred to the NRF.7 Spending would be further constrained by a fiscal mechanism that would transfer 50 percent of the proceeds from the NRF to the sovereign wealth fund. [...] The critical financial questions: • As of April 2022, what is the total development cost that Guyana owes the three companies? • What are the legacy costs that were the subject of the pre-contract cost audit that has not been released? 2.