Decision on local oil refinery will be made in the best interest of Guyanese – Harmon

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Minister of State Joseph Harmon, has announced that the Government will be considering all advice being offered before it makes any decision on establishing an oil refinery here.

Minister of State Joseph Harmon

During a recent engagement with local media corps, Harmon noted that at the conclusion of this process, a memorandum will be submitted by Natural Resources Minister Raphael Trotman.

“We have to take on board all of the advice that is given and then at the appropriate time the Minister (of Natural Resources) will bring a memorandum to Cabinet upon which we will cogitate and make a decision that is in the best interest of the people of Guyana,” Minister Harmon said.

It was only last month that Pedro Haas, Director of Advisory Services at Hartree Partners revealed that the cost to construct an oil refinery would be US$5 billion. Haas had been tasked with carrying out a feasibility study for an oil refinery in Guyana. According to Minister 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.

Natural Resources Minister Raphael Trotman has stated that Government has not made any decision on whether it would construct a refinery or not. He had explained that this could not be a unilateral decision.

Trotman had said most of the decisions would be made by “political imperatives”. However, he said he hoped that the economic importance would not be lost when a final decision was made.

The Minister said consultations would continue in various other parts of Guyana and in the Diaspora before a final decision was made as to whether Guyana should build its own oil refinery.

The results of the study have not met the satisfaction of sections of Guyana’s business community, who argue that an oil refinery makes practical sense if Guyana is to receive a portion of crude oil. As a result, some had requested the study in order to do an independent analysis.

Following reviews of the technical and environmental aspects of the Liza Project Development Plan that was submitted by Esso Exploration and Production (Guyana) Ltd (EEPGL) in December 2017, the Government is expected to grant a production licence to ExxonMobil for petroleum production to move ahead in 2020.

The Stabroek Block is 6.6 million acres (26,800 square kilometres). Esso Exploration and Production Guyana Limited is the operator and holds a 45 per cent interest in the Stabroek Block. Hess Guyana Exploration Ltd holds a 30 per cent interest, and CNOOC Nexen Petroleum Guyana Limited holds a 25 per cent interest.

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