Home Top Stories Govt to handle sale of Guyana’s portion of crude oil – source
Oil and gas sector
…separate from ExxonMobil
With first oil just around the corner, Guyana appears to be poised to market and sell its own portion of crude oil, as opposed to having oil giant ExxonMobil sell on the country’s behalf.
According to sources close to the Energy Department, a plan is still being developed for how the oil will be sold – one which will aim to find Guyana the best markets based on profitability. Guyana Times understands, however, that it is still in the early planning stages.
Back in 2017, Natural Resources Minister Raphael Trotman was reported in sections of the media saying that the sale of its share of petroleum to local buyers could be considered. He had noted that what government wanted was a profitable model.
In 2017, Director of Advisory Services at Hartree Partners, Pedro Haas, had revealed that the cost to construct an oil refinery in Guyana would be US$5 billion. Haas had been tasked with carrying out a feasibility study for an oil refinery in Guyana. According to Minister of State Joseph Harmon, Cabinet is still to review the findings of the study.
The feasibility study found that it would be too costly for the Government to invest in an oil refinery. The consultant had said that the final results of the study show that Guyana would be “destroying over half the value of your investment the day you commission your refinery.”
The company looked at economic models used in other oil-producing countries and compared them with the scale and complexity of Guyana’s potential oil market to come up with the recommendations. Expert opinions from oil and engineering companies were also taken on board.
But persons have expressed an interest in building an oil refinery in Guyana. A team of professional foreign investors has expressed interest in establishing an oil refinery in Linden, Region 10 (Upper Demerara-Berbice), with the intention of providing technical skills training to the community’s workforce and education sector.
Prospects for the initiative were discussed on Wednesday when the team met with regional stakeholders at the office of the Regional Democratic Council (RDC) in Linden.
The team was led by US-based Ghanian entrepreneur Quincy Sintim-Aboagye who owns an oil company and Alfred Fafali Adagbedu who is the Chief Executive Officer (CEO) of Seaweld Engineering Limited in Ghana.
Apart from the refinery, the team had also expressed intentions to establish a hotel and to develop economic avenues for local farming. The two sides also discussed the possibility of implementing training at the Linden Technical Institute (LTI). The investors have posited that there will be opportunities for job creation and training in areas such as welding.
Other benefits they had highlighted are cheaper gas and electricity prices with additional interests in crude oil, bauxite expansion, the establishment of an industrial complex in Guyana.
After its 10th discovery of oil in the Stabroek Block, ExxonMobil has estimated the recoverable resource in the block to be five billion oil equivalent barrels. At US$50 a barrel, that equates to well over US$200 billion.
Then there is the fact that two subsequent discoveries were made earlier this year. In addition, an independent assessment, or competent persons report, had found that 2.9 billion barrels of oil existed in the Orinduik block.