THE Government of Guyana is yet to decide where it will refine its portion of oil, when U.S. oil giant ExxonMobil begins production come 2020, Minister of Natural Resources Raphael Trotman disclosed Friday.

Speaking at a post-cabinet press briefing held at the Ministry of the Presidency, Trotman told reporters that a sub-committee for the petroleum sector formed by President David Granger is continuing deliberations on oil refineries. “[A]Cabinet sub-committee formed by the President last year is still determining that question as to where. We are examining several proposals from investors for small, modular refineries are being examined,” said the Natural Resources Minister.

The Cabinet sub-committee comprises Trotman, the Ministers of State, Finance, Infrastructure, Business and the presidential adviser on petroleum, Joseph Harmon, Winston Jordan, David Patterson, Dominic Gaskin and Dr Jan Mangal, respectively.
At the level of the ministries, there is also a Petroleum Sector Ministerial Committee comprising the Ministers of State, Natural Resources, Finance, Infrastructure and Business.
Meanwhile, Minister Trotman reminded that Trinidad and Tobago has made a formal request to the Government of Guyana to refine its oil after production commences in 2020. “…Of course, as the contract terms set out, Guyana may request the operator, that is ExxonMobil, to do its refining and just collect the proceeds therefrom,” the minister said.
Trotman made it clear that a decision has not been taken by the Cabinet sub-committee, but the matter is being actively considered as various options are available. Each option, the Minister of Natural Resources said, has advantages. “If we refine at home, of course we’d provide jobs, if we refine in Trinidad, then of course there is regional consideration…and the ability to provide petroleum products to other CARICOM countries and perhaps take up the slack from PetroCaribe,” said Trotman. Moreover, he said if Guyana decides to send the oil farther afield to the Gulf of Mexico to be refined, the country will receive the proceeds.

“So there are a number of different political and economic considerations that the sub-Committee is considering,” which he stressed will be taken to Cabinet for further discussions and decisions. Asked to state the pros and cons of Trinidad and Tobago refining Guyana’s oil, the Minister of Natural Resources noted Trinidad’s capacity as an oil-producing nation, but stated that that country’s fuel is heavier.
That aside, a decision was made by government to reconstitute a high-level committee between Guyana and Trinidad and Tobago to further deliberate on the matter. Additionally, that committee will also discuss avenues in the agricultural, engineering, infrastructural, and tourism sectors to name a few.

“And with 2020 fast approaching, government is looking to finalise all outstanding issues before the start of production. …It is under active discussion and a decision will be made long before production starts,” Trotman assured.

The minister had earlier this year at a Business Summit said that government could ill afford to invest US$5B on an oil refinery here. “Government has concluded that it, as a government, cannot spend five billion dollars on an oil refinery, but we are not in any way dissuading the private sector from taking up the challenge,” he told the summit. Back in May, 2017, ?Director of Advisory Services at Hartree Partners, Pedro Haas, who conducted a feasibility study, said the construction of an oil refinery here to process some 100,000 barrels daily would be a political decision. He explained that it would cost up to US$5B to construct a local refinery, while noting that Guyana would likely see a negative rate of return on its investment at approximately US$3B.