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Guyana govt officially pours cold water on building oil refinery

Pedro Haas delivering the results of a desktop feasibility of building an oil refinery in Guyana.

The Guyana government on Wednesday officially stated for the first time since a feasibility study was conducted that it would not build a US$5 billion oil refinery, but said it would not oppose the private sector risking the investment.

Addressing a panel discussion on energy at the Guyana Business Summit, Minister of Natural Resources, Raphael Trotman said government could not afford to drill down such a large amount of cash on such a facility.

“Government has concluded that it, as a government, cannot spend five billion dollars on an oil refinery but we are not in any way dissuading the private sector from taking up the challenge,” he told the summit which is being held in collaboration with the Inter-American Development Bank (IDB).

He noted that there is talk about building a much smaller modular oil refinery in Region 10 “and we are prepared to give favourable consideration that can meet good standards and guidelines”.

Back in May, 2017 when the findings of a desktop feasibility study that was conducted by Director of Advisory Services at the New York-based Hartree , Pedro Haas, were revealed, the Minister had said that the construction of an oil refinery to process 100,000 barrels per day would have been a political decision to generate and maintain jobs.

Guyana domestic fossil fuel consumption is estimated at 15,000 barrels per day.

Meanwhile, Trotman said government was opened to giving up some of its powers in the proposed Petroleum Commission whose Bill is currently before a parliamentary select committee for consideration by stakeholders. “When we resume our work, we are open to all reasonable ideas. We are open to the dilution and the diminution of powers away from government and  we are open to greater inclusivity om that regard so rest assured that this is not something that is not under consideration and we welcome your support,”  he said.

Consultations on a National Local Content Policy, he said, were continuing with the assistance of Trinidad and Tobago expert, Anthony Paul.

Guyana’s developing oil and gas sector is receiving support from the United States, Canada, The Commonwealth and the Inter-American Development Bank.

  • Yannick23

    Here again goes another visionless and anti progressive decision. We are blessed with a lot of Waterfalls and the Govt decided not to harness on of them for Hydro Electricity. Now again we are blessed with black gold, Oil (Light Crude) and Natural Gas and yet again Govt decided not to build an Oil Refinery. How dumd can we get. At the least we could generate thousands of jobs just in those two sectors, but no we can’t build any thing that will in the long term will benefit the Country and its future Generations. This is a truly regressive Govt with no positive vision for the future of Guyana. Anyone who did say Guyana is doomed under this Govt is so accurate that I myself and now very convinced that we will forever go backward.

    • Gtloyal

      If you do not know about something , stay quiet and don’t shoot crap. Do you have any idea of what it means to invest US$5 billion to produce a mere 100 or 200 thousand barrels of oil? Oil is now at around $50. Read up and do your math.
      Let’s say thanks its not the kleptos who are in power.

      • Yannick23

        Trinidad has been pumping oil for 110 years now and they have their own Refinery. Canada regretted the fact that they scrapped their refinery and is sending its crude from the Alberta Oil Sands to the USA to refine and then sells Gas back to Canada and it is 10 times the price. There are many examples in Africa, Saudi Arabia, Venezuela and many other countries where Oil breeds Corruption, I as a Guyanese who voted for this Coalition Govt recognized like thousands of other where we are going as a nation. The PPP curroptors and thieves messed up a lot of thing but I think you are asking for this Govt to beat them. By the way, when I say harness the falls and build the refinery, I am talking real progress for the very long term in the Economy of our country and for the job Sector.

        • Gtloyal

          There is a time for everything. Anyone with some common sense would know that this is not the time for the GoG to be looking for 5 billion to build a refinery. Who would finance it and if any institution does, what would be the cost? Without adequate anti- corruption legislation in place nor the infrastructure and institutions to enforce it, what do you think would happen?
          People want to see things done … everyone wants to see development but is having governments investing and owning companies the best way to go about it? I’d say let private enterprise lead the way as we see in most developed countries.
          It’s good to dream but reality has a way of awakening dreamers. There is a good reason why Rome wasn’t built in a day.

  • Yannick23

    A good point made.

  • bradlevin

    Totally agree with the government not to invest that kind of money into a refinery. Over the years oil companies has been closing refineries at an alarming rate because they were deemed unprofitable. Not long ago Hess oil closed a huge oil refinery on the Caribbean island of st Croix. That refinery had the capacity to refine over 650 thousand barrel a day. I agree with the government. Let the private sector undertake that venture.