Are the consultants right on this one? Oil refinery not feasible!

May 20, 2019 Letters

DEAR EDITOR,
A recent article appearing in KN on May 14th, “Even with 5.5 billion barrels. Oil refinery not feasible for Guyana-Consultant stand by earlier study report,” may not have the support of the Guyanese public. I am of the opinion that if a poll is held to determine the public opinion on whether the experts are right on this issue, it will show that Guyanese do not believe the experts on this one.
Naturally! There is a relevant reason for disbelief amongst the populace. We live next door to an oil producing neighbour that has oil refinery and despite their present economic situation, Guyanese are envious of the fact that a litre of oil in Venezuela is much cheaper than a litre of water.
Deep in our Guyanese psyche, is the belief that the same could transpire here, if only we had our own refinery. The consensus here is not what is economically viable- who gives a damn! Our primary concern is that as an oil producing nation we must have access to cheap oil and to have cheap oil we must have our own oil refinery. With that in mind, the expert opinion against building our own refinery is considered malicious and spiteful.
The concerns from the public is manifold and the questions are numerous. Do oil refineries come in one standard size? In the PSA with Exxon, it seems our two percent as royalties seem locked away to the point where it cannot be collected in liquid oil. Was that a consideration against the refinery?
Can we have a small refinery to refine our two percent for our national needs with any excess to the Caribbean market? Had the consultants factored in the amount of monies Guyana spend annually on oil and petroleum products? Wherever there is crude oil there is gas-crude being a product of decayed organisms over millions of years. Can we have some of that on shore so that our people can have a cheaper price for oil and cooking gas?
There is a popular opinion that if we cannot have cheap oil and cooking gas, our oil resources will never benefit the poor. The truth be told! A mere 25 % of the population is aware of the reliance of government on the tax on fuel imported in Guyana. The consumption tax on imported fuel is a humungous 70%. It is the mother contributor to the state’s coffers. If the tax on fuel is taken away, oil becomes cheap.
We don’t need our own refinery to have cheap oil. No government will ever want to take that tax away, not even with oil revenues to fill that gap. The justification by governments for this 70% tax on fuel is that the owners of vehicles and industrial machinery are well off and can afford to pay this tax.
Conveniently! Nothing is mentioned that this tax is invariably passed down to the consumers, of which the poor makes up the larger percentage, in the form of transportation and production costs.
We are yoked with a PSA with Exxon that requires Exxon to be repaid every single dime it claims it invested, audited or unaudited, from day one of its search for oil in our territory. This extends further, to the production of every barrel of oil. When the cost for the search for oil and the cost to first oil would have been repaid, we could safely say Exxon did not invest a dime to command 50% of the profit from our resource.
Exxon’s record on cooperate social responsibility around the world paints a picture of greed. Exxon has been cited for paying people in the scientific community to alter the results of a study on climate change- a study that entails the survival of the human race on the planet. What hinders this company from getting to a consultant we hire to decide if an oil refinery is feasible.
Rudolph Singh

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