…Min Harmon says gov’t still actively discussing issue

STATE Minister Joseph Harmon said while there is information in the public domain suggesting that oil refineries will be set up at different parts of the country, government has not been engaged, nor has it a made decision with respect to the establishment of an oil refinery.

Responding to a series of questions on the budding oil-and-gas sector, and in particular about the news of an oil refinery being set up in Linden, Region 10, Minister Harmon said he too has been hearing about the establishment of oil refineries in different parts of the country.

In a Demerara Waves article on February 10, 2018, Operations Director of GuyEnergy Steve Rowan said plans are moving apace for the construction of a modular oil refinery to produce fuels for the Guyanese and northern Brazilian markets. “The plan is to basically start construction at the end of this year and through next year, so that the refinery is ready for operation early 2020 to coincide with first oil,” Rowan was quoted as saying.

With the construction of the modular refinery expected to cost just under US$100M, Rowan reportedly said that the facility will be built in Linden with a capacity of 30,000 barrels per day.

But Minister Harmon said government has not been engaged with respect to the construction of oil refineries in any part of the country. “Every week I am hearing about oil refineries, there is one to be done in Georgetown by somebody, there is one to be done in Essequibo, one in Berbice, now one in Linden,” he commented.

The State Minister made it clear that government has not made any decision with regard to the establishment of an oil refinery here. “We have said that the question of establishing an oil refinery is still an ongoing discussion. We haven’t made a decision on it at the level of government,” he said. Minister Harmon added that making such a decision is a critical one, and cannot be dealt with lightly.

“These decisions require careful analysis and careful study and as far as I am aware, we have not made a decision in that regard that we are going to establish an oil refinery in any part of Guyana,” he explained.

He added that what are being disseminated are basically expressions of interest by private citizens and companies. Speaking on the topic in December 2017, the Natural Resources Minister Raphael Trotman like Minister Harmon indicated that government has not made any decision on whether it will refine its portion of oil when the U.S. oil giant ExxonMobil begins production come 2020. A sub-committee formed by President David Granger has been deliberating on the matter.

The Cabinet sub-committee comprises Minister Trotman, the Ministers of State, Finance, Public Infrastructure, Business and the presidential advisers 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, and Public Infrastructure and Business. 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,” Minister Trotman had said.

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. 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.

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.