Latest update February 23rd, 2025 1:40 PM
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Private persons can take up oil refinery – Dr. Mark Bynoe
Members of the private sector and the nation’s youths took the opportunity to raise a burning concern about Guyana developing an oil refinery, at an event which was hosted by the Department of Energy.
The event which was held yesterday at the Umana Yana under the theme of Youths and the Oil and Gas Sector, saw a great turnout by the young people of the nation.
The question was thrown at the panel, whether Guyana will develop an oil refinery. According to one of the private operators, “I am willing to invest in a refinery. Building a refinery can bring down energy cost.”
In his answer to the question, Dr Mark Bynoe, Director of the Department of Energy, stated, “At this stage, given the location which is largely in deep–water, no.”
He further stated that decisions will not be based on emotions but rather evidence.
Dr. Mark Bynoe
“If a detailed analysis is done near-shore or even off-shore, it may be proven more feasible to do a refinery.”
Dr. Bynoe moved to say that, even though they are not going forward with an oil refinery, any private person can still take up the idea.
“If a feasibility analysis demonstrates it is more feasible to do that, then we will do it. That however, doesn’t preclude any private persons if they so wish to do it. Persons wishing to open an oil refinery can do so but they will not receive subsidised oil from the department, as they will simply be purchasing oil at market prices.”
Furthermore, a technical specialist within the department, Matthew Wilks, said, “There is too much refining capacity in the world. It is cheaper or more cost effective to have oil refined by foreign companies.”
In a study, which was done by the government in 2017, it was found that a refinery was not feasible. The study was done taking the scale, construction cost, timeline and other variables into consideration, such as nearby refineries.
It was noted that if Guyana is to consume between 13,000 and 14,000 barrels of oil per day, that will be way below the 200,000 barrels of oil a standard size refinery can process.
Hypothetically, should a 100,000-barrel per day refinery be constructed just to cater for Guyana’s consumption, it will cost somewhere in the vicinity of US$5B with a negative rate of return on investment at between US$2B and US$3B.
This means that the output of the refinery will not compensate for the monies that will be spent to construct and operate the facility nor will the capital return.
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