Government is still considering several options when it comes to refining the oil it hopes to receive when oil and gas production commences in 2020, Natural Resources Minister Raphael Trotman has said.
Trotman noted that nothing has been ruled out as yet, but the Government was actively looking at all the options before it made a final decision, taking into account offers made by neighbouring countries.
He disclosed that the twin-island republic of Trinidad and Tobago has already made a proposal, which was currently being looked at by all the key players in the decision-making process.
“Trinidad has put in a submission and we will have to consider it. We are still doing so,” he said recently.
The Minister hinted mid last year that Trinidad had already approached Guyana about the idea of refining its oil. That country is currently operating below optimum capacity and is importing oil from Nigeria.
During that same period last year, a large delegation of Trinidadian businessmen and women working in the oil and gas sector had visited Guyana to explore business opportunities.
The 25-member trade delegation lobbied strongly for opportunities, expressing a belief that they could play a role in the nascent sector and efforts would be made to explore opportunities locally.
But Trinidad is not the only country that has expressed an interest in partnering with Guyana. Suriname had expressed an interest too. However, it was discovered that Guyana’s oil was too light and the chances of it being refined in that country were slim.
Despite this, late last year, Government said it was exploring the possibility of sharing an oil-processing facility with Suriname even as new oil companies had expressed an interest in exploration activities.
“We did discuss with Suriname the possibility of us establishing a joint industrial centre or site to service both countries,” said Minister Trotman in October last year.
His statement came days after his return from a visit to the neighbouring Dutch-speaking Caricom country. “That’s something that I wish to raise with my minister colleagues here,” he added.
Government has already hinted that it would not be investing in an oil refinery at this time, but would support Private Sector efforts towards this end.
Trotman said that while the Private Sector has not yet approached his Ministry on the proposal, the US oil company Chevron has made “a very good proposal” to work in Guyana.
Additionally, Trotman said last week a decision would be made as regards Chevron’s application soon. However, other companies such as Total have submitted applications for offshore concessions as well.
“That is still pending. They are already looking to collaborate with Eco Atlantic,” he stated.
In May 2017, a feasibility study about Guyana building an oil refinery was shared with the public, at a consultation.
Director of Advisory Services at the United States-based Hartree Partners, Pedro Haas had said that the cost to build a refinery that would produce 100,000 barrels of oil per day was US$5 billion, with a construction period of 50 to 60 months.
This cost not only catered for the off-site location and other facilities, but took into account the cost for energy, hydrogen supply, water and docking.
Even with a smaller oil refinery, Haas said, there was a high possibility of Guyana getting a negative rate of return on an investment of between US$2 billion and US$3 billion.
Some Guyanese here and abroad believe that Guyana should build its own oil refinery, because even if this was done at zero profit, it has the potential to create between 3000 and 6000 jobs. More than that, Guyana could become the exporter of more than 100 by-products, including fertilisers.
Some US$500 million has already been set aside to build an onshore oil and gas facility at Crab Island, at the mouth of the Berbice River. The facility, which will largely support ExxonMobil’s offshore oil exploration and production operations, will include heliports, maintenance and transportation hubs.
Earlier this year, ExxonMobil announced the sixth oil discovery offshore Guyana since 2015. The company had positive results from its Ranger-1 exploration well. This discovery adds to previous world-class discoveries at Liza, Payara, Snoek, Liza Deep and Turbot, which are estimated to total more than 3.2 billion recoverable oil-equivalent barrels.
