No decision yet on oil refinery – Harmon

There have been several reports of plans to establish oil refineries at various locations across the country, but State Minister Joseph Harmon has declared that Government is yet to make a decision on the matter. “The question of establishing an oil refinery is still an ongoing discussion; we haven’t made a decision on it at the level of Government,” Government’s Chief spokesperson said at the post-Cabinet press briefing on Thursday.
He added that the issue of setting up an oil refinery is not one to be taken lightly and decided upon easily.
“These decisions require careful analysis and careful study; and as far as I’m aware, we have not made a decision in that regard — that we are going to establish an oil refinery in any part of Guyana,” he asserted.
Minister Harmon explained that there are private citizens and companies that have been expressing interest in establishing oil refineries.
“Every week you have these companies popping up, and so I wouldn’t doubt that there is something out there in the public domain; but what I can say to you is that there is no engagement with the Government in that regard insofar as the setting up of an oil refinery in any part of this country (is concerned),” he clarified.
Oil refinery
The most recent reports of the establishment of an oil refinery here was made by local company GuyEnergy during the inaugural petroleum summit – GIPEX – that was held earlier this month.
Chief Executive Officer of GuyEnergy, Dr Turhane Doerga, had revealed that his company is working on building a modular oil refinery in Linden, Region 10 (Upper Demerara-Upper Berbice).
His British partner and Operations Director of the company, Steve Rowan, had stated that the facility would produce fuels for markets both in Guyana and in Brazil using crude oil from ExxonMobil. This facility is expected to have a capacity of 30,000 barrels per day.
Construction is scheduled to start at the end of this year, and be completed in 2019 for operation, ahead of first oil the following year. It was explained that the refinery would be operational before the commencement of the 2020 oil production, and as such, crude would be outsourced in the meantime.
The cost for building the modular refinery is pegged at just under US$100 million. A desktop feasibility study conducted by Director of Advisory Services at the United States-based firm Hartree, Pedro Haas, had found that it would cost some US$5 billion to build an oil refinery in Guyana, and at least half the invested amount would be lost upon commissioning, with a negative rate of return on investment between US$2 billion and US$3 billion.
Haas had stated mid last year that it was not feasible to establish a refinery with a capacity of 200,000 barrels per day when Guyana’s daily demand is between 13,000 and 14,000 barrels per day.
However, Doerga had posited that Haas only looked at establishing full-scale refineries and not at modular ones. He explained that the former facility is outdated and catered only for large-scale refining. The GuyEnergy CEO further pointed out that nobody uses large refineries anymore. As such, he could not understand why the government-paid expert did not considered smaller and more efficient modular types used globally in his study.
Nevertheless, based on the findings in the feasibility study done by Haas, Natural Resources Minister Raphael Trotman had stated back in October that Government would not be going ahead with constructing an oil refinery. He said Government cannot afford such a large investment, but at the same time, he welcomed such investments by the private sector. In fact, the Natural Resources Minister had said that talks were buzzing about building a much smaller modular oil refinery, and Government is prepared to give favourable consideration that can meet good standards and guidelines.