Page 11 - LatAmOil Week 42 2022
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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)



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