Page 11 - LatAmOil Week 42 2022

LatAmOil GUYANA LatAmOil

Officials in Georgetown have said that the new observers calling it overly favourable to the US
contract model will reserve a larger share of super-major. ExxonMobil has argued, though,
profits for the Guyanese government than the that the terms are justified, partly because of its
contract awarded to ExxonMobil (US) and its position as the first upstream operator to de-risk
partners for the oil-bearing Stabroek block. a frontier hydrocarbon basin and partly because
The Stabroek contract has drawn no small of its agreement to shoulder the costs of explo-
amount of criticism within Guyana, with some ration. ™

Guyana issues RFP for 30,000 bpd refinery

THE government of Guyana issued a request for Applicants will also be expected to show evi-
proposals (RFP) last week for the design, financ- dence of their financial ability to carry out the
ing and construction of a 30,000 barrel per day project, including audited financial statements
(bpd) oil refinery. The RFP calls for the plant from the last three years, along with evidence
to be built on land at the mouth of the Berbice of their ability to secure financing for the con-
River, on a 30-acre (12-hectare) site that will be struction of the refinery, either from their own
provided to the contractor by the government. resources or via funding from third parties.
As the refinery will produce fuel for the local Meanwhile, potential investors must also
market, it is anticipated to play a significant role include in their proposals an estimate of pro-
in the country’s journey to energy independ- ject costs, complete with detailed breakdowns
ence. The government of Guyana is therefore of capital costs, development costs, supervision
expected to provide an array of fiscal incentives costs and other expenses related to commercial
for the project, including a 10-year tax holiday, operations.
guaranteed access to the domestic petroleum Guyana began producing oil in late 2019
product market and steady supplies of feedstock but has remained completely dependent on
coming out of Georgetown’s own share of profit imported petroleum products, as it does not
oil at market prices. have any domestic refining capacity. Vice Presi-
Construction of the refinery is likely to com- dent Bharrat Jagdeo has repeatedly pointed out
mence in the first quarter of 2023. The govern- that the refinery project will help bolster Guy-
ment expects the project to be completed no ana’s energy independence, especially in light of
more than two years after the start of work. the volatility in world oil prices stemming from
According to the terms of the RFP, propos- geopolitical conflicts. Indeed, rising fuel prices
als must include a detailed track record of sim- have helped ramp up public pressure on the
ilar projects that the applicant has completed, Guyanese government to implement measures
emphasising the role played in the financ- to cushion the population from the economic
ing, design and construction of said projects. effects of such developments. ™

The refinery may be built on Crab Island, at the mouth of the Berbice River (Image: dpi.gov.gy)

Week 42 19•October•2022 www. NEWSBASE .com P11