Refinery or strategic reserves? Guyana explores options for fuel security

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Guyana is still considering a refinery, according to Vice President Bharrat Jagdeo, with five prospective investors already identified. 

“We have been having discussions with a number of people who have expressed interest. That group was narrowed down to about five,” the VP shared during a Jan. 4 media conference.

But this is just one option to ensure Guyana’s energy security; Jagdeo said that the country is also actively exploring having its own strategic reserves. And this, according to Jagdeo, could eliminate the need for a refinery. 

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

“…if you do have strategic reserves, it may kill the economic justification for having a refinery. But…I want to make sure that you all [understand] that the government is [still] considering. We are looking at every option and all the studies, the numbers, etc because often it is the numbers that ultimately will influence the decision,” Jagdeo explained. 

With the refinery, the VP said among the five contenders is the Dominican Republic (DR); a proposal for a 50,000 barrel per day (bpd) refinery was submitted last year after the signing of a memorandum of understanding (MoU). The MoU puts forward a 51% stake for the DR. The Guyana government has ruled out being a shareholder.

Prior to that, Guyana had envisaged a refinery with the capacity to process 30,000 bpd, to be established on Crab Island at the mouth of the Berbice River, and was engaging private interests.

Talk of the refinery is ongoing. And adding to that drawn-out process, according to Jagdeo, are attempts to alter the parameters set by the government. 

“…when you get to discuss more granular issues, you start experiencing some diversions from the parameters we established at the beginning. People want to change those parameters, saying we cannot stick with those. So, if you change the parameters, you often change the nature of the project..” he told journalists. 

The construction of the modular refinery was proposed in 2022, with several US-based companies submitting bids for the project, including Quanten Consortium Angola LLC, Environmental Solutions Inc., and SPEC Energy DMCC. Other bidders included CH4 Guyana Inc. & Lindsayca Inc. in collaboration with Sol Guyana Inc., Freight N Cargo Logistics Inc., DRL Engineering in collaboration with Globe Engineering Supplies & Services FZC (GESS), and Berbice Green Refining Inc. in a joint venture with ARC Energy, Polaris EPC, and Barson SG.

The government had previously stated that it would provide the selected firm with 30 acres of land, a 10-year tax holiday, a supply of feedstock (oil) from Guyana’s share of profit oil at market prices, and access to the domestic market for the sale of refined products (if desired).

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