Discussions on oil refinery narrowed to five interest groups but strategic reserves still being explored
The government is still considering the possibility of setting up an oil refinery in Guyana and discussions between the administration and possible investors have been narrowed to five interest groups.
This is according to Vice President Dr. Bharrat Jagdeo who spoke during a press conference at the Office of the President on Thursday.
“We have been having discussions with a number of people who have expressed interest. That group was narrowed down to about five,” Jagdeo told reporters.
The VP said the five groups include the one from the Dominican Republic that signed an agreement for the establishment of an oil refinery here. He said attempts to change the parameters established by the government have slowed the process.
“When you get to discuss more granularly the issues, you start experiencing some divergence from the parameters we established, people want to change those parameters.
“They say they can’t stick with those and if you change parameters, you change the nature of the project and then you have to wonder if it is fair to those people,” Jagdeo reasoned.
The government expects that the facility will refine 30,000 barrels of oil daily.
Based on the Request for Proposals issued by the Ministry of Natural Resources, the government hopes that an investor will design, finance and construct the refinery on about 30 acres of land at Crab Island, found at the mouth of the Berbice River.
The land, it was noted, will be provided by the government. The government will also supply oil from Guyana’s share of the profit oil produced offshore.
Importantly, it was noted that “generous fiscal incentives” for the project, including a 10-year tax holiday, will be provided.
Even though the government will provide much support, it was noted that the project will be strictly financed and owned by the private sector.
But Jagdeo reminded Thursday that the government is simultaneously exploring the possibility of strategic reserves. This, he said, can kill the economic justification for an oil refinery.
“We are still in the process of exploring strategic reserves.”
The government had long expressed hopes to facilitate the construction of a new oil refinery at Crab Island, Region Six (East Berbice- Corentyne), and President Dr. Irfaan Ali said early in 2023 that the project could be finalised by year end.
In January, Finance Minister Dr. Ashni Singh announced that nine proposals were submitted to the government for the design, financing and construction of the refinery.
During a State visit to the Dominican Republic in August, President Ali and his counterpart, President Luis Abinader, signed a Memorandum of Understanding (MoU) for the establishment of an oil refinery in Guyana that could possibly refine at least 50,000 barrels of oil daily.
With this new venture, it was noted that the Dominican Republic will be the majority shareholder, with a 51 per cent stake.
But the government has not yet finalised who will build this refinery though President Ali, in an invited comment in August, said the DR’s role in the project increases its viability.
