The Government of Guyana will not sell oil at a subsidized cost to any private investor who undertakes to build a refinery in the South American country.
“Anyone who wishes to open a refinery can do so but they will not receive subsidized oil from the Department…They will still be purchasing oil at market prices,” Director of the Department of Energy, Dr. Mark Bynoe, Head of the Department of Energy, said at a youth forum on Saturday at the Umana Yana, Kingston Georgetown.
He was at the time responding to comments made by Dr. Turhane Doerga, Chief Executive Officer of GuyEnergy – a company which is pursuing a modular refinery in Linden, Region Ten.
Doerga noted that his company is awaiting word from the Department of Energy on the availability of the resource but Dr. Bynoe noted that there is “nothing” stopping a private company from setting up a refinery.
Dr. Bynoe said at this stage, the Government is not considering a state-owned oil refinery. However, he said this can change in the future since “if we have more players near-shore and even onshore, it may be more feasible.”
Currently, major players in Guyana’s emerging oil and gas industry are operating in offshore blocks. The Energy Department had disclosed in November 2018 that it is looking for investors to pursue shallow an onshore exploration.
Also addressing persons gathered at the Umana Yana on Saturday, Oil and Gas Adviser at the Department of Energy, Matthew Wilks expressed his belief that “there is too much refining capacity” globally.
In 2017, Director of Advisory Services at United States-based Hartree Partners, Pedro Haas who was hired by the Government to conduct a feasibility study into the setting up of an oil refinery in Guyana, had noted that the investment will far exceed local demand. Noting that the investment is a “risky” one, Hass has pegged the cost at US$5B inclusive of energy generation and labour. Haas has had also warned that setting up a smaller refinery now in Guyana could spell trouble down the road.