While there continue to be calls for the establishment of a smaller, less-costly oil refinery in Guyana, the expert hired to consider the matter of building a refinery in the country warns this could spell trouble down the road.
Director of Advisory Services at Hartree Partners LP, Pedro Haas, shared these concerns during a meeting with Guyanese investors and businessmen prior to his departure from the South American country last Thursday.
He pointed out that his findings that a 100,000 barrel per day refinery will not be feasible were based on a model in which specific numbers were inputted. Such a facility, Haas had projected, would cost as much as US$5B.
Speaking at the meeting on Thursday held at Cara Lodge in Georgetown, Guyana’s capital city, Mr. Haas noted that one could apply different numbers and come up with a refinery that is much smaller and below industry standards. However, he asked whether this would be what the country wants for itself. He made the point that if one were to go into such an undertaking, one might as well aim for industry standards. These ‘shortcuts’, he said, may have negative implications for safety and other issues later in the life of the project.
The consultant made the point that whatever size of refinery is decided upon, the capital outlays will be large and the returns on investment negative.
Guyana’s Minister of Natural Resources, Raphael Trotman, who was at the breakfast meeting told the local businessmen that government has no problem with them investing in any facility. However, he said that the Government would only be prepared to sell its oil to them at world market prices.
The Guyana government has also made it clear that it is still open to examining other options for a refinery in the country and will meet with persons who have submitted proposals to establish such a facility.
Before the meeting wrapped up one of the businessmen unveiled a plan which has been submitted to government for the construction of an onshore supply and logistics Base at Crab Island in the Berbice River. This is one among several proposals that have so far been received by government for the facility.
