Sunday, February 5, 2023

Oil refinery is to ensure Guyana does not run out of fuel, says Vice President

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While Guyana has invited interested bidders to submit proposals to finance and build the country’s first oil refinery, this is by no means an indication of the country’s interest to be the refining capital of the region, says Vice President, Dr. Bharrat Jagdeo.

With global events such as the Russia-Ukraine war underscoring the importance of energy independence, the former Guyanese Head-of-State has since clarified that this refinery is for national security reasons.

“…this is for national security purposes to have energy security at home where we don’t run out of gas or diesel or anything like that, we are pursuing this refinery,” Jagdeo said.

He was keen to note that the emergence of Guyana’s oil industry has attracted considerable interest from across the world to build a refinery. To streamline the flow of proposals, Jagdeo said the tender was seen as a useful pipeline mechanism for proper evaluation. He said all interested parties must come through this line.

Furthermore, the Vice President said he has taken note of statements by a US conglomerate, Delta Energy and Petroleum Corporation (DEPC), in some sections of the media, saying that it can build four modular refineries in Berbice. The company said each could have the capacity to refine 60,000 barrels of oil per day and create 10,000 jobs.

Jagdeo was quick to shut down such talks, as he said, “It’s all nonsense. A lot of it doesn’t even make sense.” The Vice President said the government has no interest in having a large refinery footprint, adding that these types of downstream businesses are large emitters of gas.

He said too that government is intent on avoiding a large refinery since that would involve signing an agreement with the company for continued supply. He said the government will not be locked into such arrangements.

The government’s Request for Proposals (RFP) from interested parties for the design, financing, and construction of a 30,000-barrel-per-day oil refinery was issued in mid-October. It said the facility would be located on land provided by the State at the mouth of the Berbice River in the vicinity of ‘Crab Island’.

The administration said it expects construction to start by the first quarter of 2023 with project completion no later than 2-years after the start date.

In addition to providing an estimated 30 acres of land, the government said it will also offer generous fiscal incentives for the project including a 10-year tax holiday, supply of feedstock (oil) from the Guyana government’s share of profit oil at market prices; and access to the domestic market for the sale of refined products (if desired).

It was keen to note that this project will be strictly financed and owned 100% by the private sector. The RFP explicitly stated that government will not have any ownership or investment interest in the project.

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