Guyana has capacity to build only 1 oil refinery for now – VP Jagdeo

– says Govt receiving multiple proposals from other countries

With Guyana receiving multiple proposals from several other countries to set up oil refineries – both at the private and state level, Vice President Bharrat Jagdeo has made it clear that the country has the capacity to build only one.
The People’s Progressive Party/Civic (PPP/C) Government had put out a Request for Proposals (RFP) for the establishment of an oil refinery in the country. So far, four out of the 11 companies that submitted proposals last year have been shortlisted.
During a press conference on Thursday, the Vice President disclosed that a first-round evaluation was held and they are now waiting for more information from the participating companies.
However, Jagdeo pointed out that even as they do this, a number of other countries are still sending oil refinery proposals.
“At the end of the day, if it goes forward it has to be on conditions that are good for our country and they have to meet all the financial and technical requirements. We don’t have the capacity for two refineries. There shall be if that project goes forward, one refinery,” the VP stated.
Simultaneously, however, the Guyana Government is also looking at a strategic reserve option. Jagdeo explained that the main reason for the refinery here was to ensure that national energy security.
On this note, the Vice President disclosed that the Government is also exploring the feasibility of tolling some of Guyana’s light sweet crude and bringing back the refined products to store here. He noted that from the initial numbers, this can not only guarantee national energy security but also allow for a significantly cheaper cost of energy.
“If we are doing a refinery, it will be here because it defeats the purpose of your energy security and you have the refining done in Trinidad. But if [it] can get a tolling fee, it could be refined anywhere in the world [providing it’s cost competitive] and you then store the refined products here. Then that’s a different concept… If you’re doing the refinery, it has to be done here because what if there is a disruption in global supplies or regional supplies for an extended period and the refinery is in Trinidad, that doesn’t help us,” VP Jagdeo stressed.
Trinidad and Tobago had offered to let Guyana use its oil refiney – a prospect that was shut down by the Guyanese Government.
Meanwhile, earlier this month, Guyana and Dominican Republic (DR) signed several agreements including one for the joint establishment of an oil refinery in Guyana.
In 2022, a Request for Proposals was issued for companies to express their interest in constructing a 30,000 barrels per day (bpd) refinery. Specifically, companies were asked to submit bids for the design, finance, and construction of the oil refinery, which will be located at the mouth of the Berbice River.
According to the RFP that was issued, construction on the refinery was expected to begin in 2023, with the project expected to be completed within two years. The refinery was to be located near the Berbice River.
The plan for the refinery’s construction ties into the Government’s vision of promoting value-added production and securing energy security both for Guyana and the Caribbean. It is also an integral part of the Government’s developmental plan for Region Six.
An oil refinery is an industrial plant that transforms crude oil into various usable petroleum products, such as diesel, gasoline, lubricants and heating oils like kerosene.
Refineries serve as the second stage in the crude oil production process, following the extraction of crude oil from the earth.
Once the refinery at Berbice becomes operational, Guyana will be able to sell crude oil components to various industries for a broad range of purposes, including fuels for transportation, heating, paving roads, and generating electricity and raw materials for chemical manufacturing.
This would attract global investments due to soaring fuel prices worldwide, the increased cost of heating as time goes by, and a lack of adequate refining capacity to process crude into gasoline and diesel.
Neighbouring states including Trinidad and Tobago, Aruba, The Netherlands Antilles, Cuba, Jamaica, British Virgin Islands, Curaçao, Barbados and Suriname possess oil refineries as well.