Gov’t can’t afford oil refinery – Trotman

Government cannot afford to invest US$5B in an oil refinery here and has ruled out undertaking that initiative but will support independent investors who can.

“We have done some studies on the feasibility of an oil refinery. We have opened that study for public debate and discussions…  Government has concluded that it as a government, cannot spend US$5B dollars in an oil refinery,” Minister of Natural Resources, Raphael Trotman yesterday told a private sector summit at the Marriott Hotel.

“We are not in any way dissuading the private sector from taking up the challenge,” he added, while informing that there “is one initiative for a modular refinery, a much smaller one in Region 10.”

Trotman said that his government would support private investment proposals, giving them “favour-able recognition” once they met “good standards and guidelines.”

Delivering a presentation on energy, Trotman explained that the feedback from the public remains active on the report of a feasibility study that government had undertaken, through the Hartree firm, but that his government simply could not spend the huge sum on the risky investment.

According to Pedro Haas, the  Hartree director, who was tasked with carrying out a feasibility study, the cost to construct such a facility would be some US$5 billion, and would see at least half the invested amount lost upon commissioning.

He told a public forum back in May of this year that building an oil refinery would be a very risky investment which would require a vast amount of capital.  The refinery question has arisen in light of ExxonMobil’s plans to begin pumping oil from its Liza well around 2020.

Haas explained that when calculating the cost to build refineries, the industry’s jargon presents it as a cash amount per barrel of oil. “For many years, refinery cost to build was about US$10,000 to a barrel and then it changed and rose to about US$20,000 and about, today it could be up to US$25,000”, he observed.

As such, Haas pointed out that when calculating the cost for the refinery here, the latter figure was used. Initially the company started out their calculations based on a 250,000 barrel per day refinery, but had to scale it down to a 100,000 barrel per day refinery. Additionally, because the company was only exposed to data from 2013, it had to factor in an inflation adjustment for the present, along with adjustments for the location since there would be a need for new infrastructural facilities and other ancillary facilities to support and run alongside a refinery.

Trotman’s main focus was explaining plans for the energy sector and he told the summit that government was working with all stakeholders, to have an energy mix that  best catered for the country’s needs even as it complemented its green energy agenda and economy. “We are mindful that a healthy balance has to be struck,” Trotman said.

And because the country was new to the oil and gas production sector, government has sought  help from several international partners to ensure its objectives were achieved.

These include the European Union, Conser-vation International, the United Nations Develop-ment Programme, the Commonwealth Secreta-riat and countries such as the Kingdom of Norway and the United States among many others.


Trotman told attendees that government was “working to be more inclusive” and that his presence at yesterday’s forum was to demonstrate that they were not there “to compete but to share ideas and cooperate.”


Exxon contract final -Harmon

The controversial Production Sharing Agreement (PSA) signed between the government and ExxonMobil’s local subsidiary and partners is final and will not be subject to any changes, Minister of State Joseph Harmon said yesterday.

NIS re-examining investment in Berbice Bridge, GM says

General Manager Holly Greaves yesterday said the National Insurance Scheme (NIS) is re-examining its investment in the Berbice Bridge after dismal returns over the past few years.

CARICOM staffer shot, robbed after bank withdrawal

A gunman yesterday afternoon shot and robbed a senior CARICOM Secreta-riat employee after he left the Republic Bank (Guyana) Limited branch at Triumph, East Coast Demerara (ECD), in what is the most recent attack on the bank’s customers.

President says confident in World Court cause

As Guyana celebrates 48 years as a Republic, President David Granger has reiterated his government’s intention to take the Venezuelan border controversy to the World Court and declared each citizen a protector of the nation’s sovereignty.

Police block Corriverton flag raising

`B’ Division policemen last evening blocked the Corriverton flag raising ceremony because permission had not been sought but Mayor Krishnand Jaichand believes it was stopped because the Region Six council objected to Minister of Public Security, Khemraj Ramjattan as the featured speaker.

By ,

Your browser is out-of-date!

Update your browser to view this website correctly.

We built using new technology. This makes our website faster, more feature rich and easier to use for 95% of our readers.
Unfortunately, your browser does not support some of these technologies. Click the button below and choose a modern browser to receive our intended user experience.

Update my browser now