‘Balkissoon’ was in action on May 17, 2017
The fact that many of the refineries along the Texas Gulf Coast are still working after being in services for scores of years clearly establishes the fact that an oil refinery is not a 20-year business but something that will be there for decades; thus providing enough time to recover any investment made. Pasadena Refinery (99 years old and active), Valero Refinery (108 years and active) and the Lyondell Houston Refinery (98 years and active) are just three of the many examples of old refineries that are all still actively making money for their respective owners.
So up comes Hatree Partners, which was founded by the HESS Corporation. But isn’t the HESS Corporation a 30 per cent interested party in the Exxon Project? So how is it possible for tentacles of the foreign operators to be advising the Government of Guyana its options on an oil refinery? Where is the independence? There is enough evidence available to prove that the developers have enough spare refining capacity to steer Guyana into the direction of not building a local refinery, which will result in them gaining much profits. Thus any advice from Hatree Partners cannot be considered as free from vested interests. If their advice is independent and legitimate, then I have the Brooklyn Bridge to sell to President Granger. Wake up Brother Granger, wake up!
Collectively the three foreign operators/investors have the refining capacity to process seven million bpd. So why would any of them advise favourably toward the construction of a refinery? Does this not remind you about the tune “Balkissoon” by the famous chutney artist Omardath Maharaj? Somebody trying to run away with the “dulahin” (the oil profits). If Minister Trotman doesn’t pay keen attention to this proclamation by Haas, he will find that he will be the Minister of Petroleum who supervised the process where “Balkissoon tek away the woman, the oil, the jobs, and the future of Guyana”.
It is just plain and simply absurd that a consultant will proclaim that the cost to construct such a facility would be some US$5 billion. Guyana does not need a 100,000 bpd refinery. The way the deal is structured is that the wells are projected to produce approximately 100,000 bpd. Exxon will discount the daily depreciation cost for the original investment and the daily cost of running the operations. Let us assume for discussion sake that at an average selling price of US$55 per barrel; that computes to 40,000 bpd in value? That would leave 60,000 bpd to be distributed between the investors and Guyana. According to the legal agreement, in such a scenario, Guyana will only be entitled to 30,000 bpd. So why on earth will Guyana want a 100,000 bpd refinery as is being suggested by Mr Hass?
I would agree with Mr Hass that the cost of building the refinery and the associated ancillary infrastructure are not proportionate. However, once the ancillary facilities are built, they are built for 100 years and more. So why all this big huff and puff about cost because every single cent shall be recovered in real value multiple times over because of the long investment cycle?
With such a fact on the table, any sensible investor, who is sure about a stead payback over such a long period of time, will know there is much money to be made on this project. Even the local Private Sector might buy into such a project because it is a great proposition. Thus these recommendations by Hatree Partners and Mr Pedro Hass should be rejected on multiple grounds. It fails to appropriately consider the merits of the oil deal, it does not takes into consideration Guyana’s vested political and economic interest and most importantly, this is a one-sided suggestion that clearly shows bias towards the foreign operators.
Guyana must be forever grateful to Exxon, HESS Corporation and the Chinese for putting up the seed capital to advance this dream into a reality, but there are no favours being done here; “this is business”. The foreign operators of these wells are in Guyana’s sovereign territory not because they love Guyana, but because they will make respectable returns on their investments multiple times over. Thus the Granger Administration has no right to feel empathetic or should be taking any investment advice from related parties to the foreign operators.
At the end of the day, Minister Trotman and President Granger have to be bold and brave and think about Guyana first. Thus, I respect the position adopted by Minister Trotman where he said that the Government now has to consider other views and also taking into consideration the national economic and political interest before a final decision is made. That is a perfectly correct position. It is the time for our leaders to stop acting like “indentured wusses” and think for themselves and put Guyana first.
