Govt prepared to support, sell crude to small refinery – VP

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Vice President Dr Bharrat Jagdeo has revealed that the Government, which presently has several proposals before it for setting up a refinery, is prepared to support the establishment of a small refinery, and even sell limited amounts of Guyana’s crude to such a refinery.

During the Guyana Manufacturing and Services Association’s (GMSA’s) mid-year dinner, on Tuesday at the Ramada Princess Hotel, Jagdeo, who was the feature speaker, explained that the Government, in theory, does support the setting up of a small refinery.

“We have a lot of proposals here for refineries. Right now we have several, and we said we’re prepared to sell, because I don’t know which one will go forward. So that if it will lend itself to greater energy security – which is a crucial matter for us – so that we have, in situations of crises the same way we have food crises, that we can have our own domestic supply of gas and everything else; for that reason, we’re prepared to support a small refinery,” Jagdeo said. “But we’ve had discussions with several groups, and we’re prepared to sell a limited number of barrels of crude to the refinery to make that work.”

There is, however, a darker side to refineries that Jagdeo alluded to in responding to questions from the audience. Besides the pollution that comes from refineries, Jagdeo noted, most of the proposals also wanted tax holidays.

Jagdeo also debunked the belief that refineries should be set up on the basis of job creation. In fact, he noted that even with a refinery and a gas-to-shore project complete with a Liquid Natural Gas (LNG) facility, there would not be enough jobs retained to cater to the needs of Guyanese. Those facilities will, however, provide a much-needed boost to Guyana’s push to be industrialised and to have enough gas to export.

“My point is that we’re bringing in a pipeline. The gas will come in. The gas will be used to generate power, the first 50 million cubic. We will have an LNG facility that will supply enough LPG for us to export. We’d have to find an export market for LPG, cooking gas. Then we have another 70 to 80 million cubic feet of gas that will come in. That will be utilised for other industries.

“So, we are going to utilise gas to industrialise and to do a lot of things. We’re talking about fertiliser, fibre, a whole range of other products, downstream industries. So, we’re going to do that. My point was that when you look at all of those investments, you still cannot absorb the number of young people who are looking for jobs,” Jagdeo explained.

As such, the Vice President stressed the importance of expanding the services industry, mining, forestry and other sectors that are more job retentive.

Even as Guyana receives growing interest for small refineries here, Trinidad and Tobago has been touting the availability of Petrotrin – it’s state-owned refinery that is currently under negotiations for sale or lease – to refine Guyana’s oil.

This was revealed by Prime Minister Dr Keith Rowley during a press conference in Port of Spain shortly after returning from a week-long engagement in Guyana, for the Agri Investment Forum and Expo that was held from May 19 to 21. According to Rowley, discussions were held on the possible use of this Trinidad refinery during his engagements in Georgetown.

“If Guyana has oil and Guyana is interested, with someone who we have selected here or are selecting, then those conversations should take place,” Rowley has said.

“It all has to do with a supply of oil to the refinery, which exist and can, with some not insignificant effort, be brought back into operation, if only there is an entity with a supply of oil. That entity is not the Government of Trinidad and Tobago, it’s not Petrotrin,” the T&T Prime Minister posited.

Petrotrin (Petroleum Company of Trinidad and Tobago) was closed back in 2018. At the time, the unavailability of a sufficient supply of oil being produced locally to keep operations going had been cited.

At a press briefing in Guyana before he had departed after the close of the Agri Expo, PM Rowley had explained that due to the lack of an adequate supply of oil locally, the country had to import as much as 120,000 barrels per day to be refined; but, in that process, would incur losses. This situation led to the closure of the facility.

Successive Governments in Guyana have been cautious on the matter of building in Guyana a refinery that is State-owned, resulting in the only takers for this initiative coming from the Private Sector.

The former A Partnership for National Unity/Alliance For Change (APNU/AFC) Government had previously hired a consultant, Pedro Haas, to carry out a feasibility study into constructing an oil refinery. The results of the study did not favour building a refinery, particularly one with a capacity to produce over 100,000 barrels per day.