A key private sector body in Guyana has asked the minister responsible for natural resources, Raphael Trotman, to provide it with the model used by consultant, Pedro Haas, which led him to conclude that setting up a refinery in the South American country is not feasible.
Haas, Director of Advisory Services at Hartree Partners LP, was hired by the Guyana government to determine if it was economically feasible for the country to build a refinery for its oil, production of which will begin in 2020. Mr. Haas outlined a number of scenarios that saw the cost of setting up such a facility being as much as US$5 Billion. Taken together with other factors, he concluded that such a venture would not be feasible. He made a public presentation of his findings on Wednesday in Georgetown, Guyana.
The Haas Report was not well-received by some sections of Guyana’s business community and members of the public present at the presentation. Business representatives remain adamant that setting up an oil refinery is pivotal if the country is to realize the true benefits of being a major oil producer.
Mr. Trotman has indicated that government is still open to examining other options and will meet with persons who have submitted proposals to establish a refinery in the South American country.
In a meeting on Thursday with Mr. Trotman, President of the Georgetown Chamber of Commerce and Industry (GCCI), Deodat Indar, shared these concerns. Mr. Indar said while the business community was happy that government had conducted public discourse on the refinery and provided a snap shot of the findings, more details would be needed to ascertain how the conclusion was arrived at.
Speaking with OilNOW on Friday, the GCCI president said, “We are very happy that the
Minister and the Ministry had conducted public discourse on the refinery and to give us at least a snap shot in terms of the broad areas of concerns and issues, but we as a private sector would like to get access to the model that give rise to the results that was shown to us.”
He said this would afford them the opportunity of “testing it for ourselves to remove all reasonable doubt that a refinery is not feasible or is feasible.”
“We have requested the working document, the spreadsheet and the models to see if we can process it for ourselves,” he added.
Experts in the field have told OilNOW that current conditions make it extremely risky for any country to invest in a new refinery. They point to existing refineries in countries such as Suriname, Venezuela, Mexico and Trinidad and Tobago, where merely maintaining these structures was proving to be too costly.
Mr. Indar said the minister was receptive to the request made by GCCI and he expressed a readiness to ensure a process can begin that would allow for a full review of Mr. Haas’ findings.