Why is the Government not dealing with the 6 to 10 refinery proposals

Oct 20, 2022 Letters

Dear Editor,

First, I am happy to hear that the Irfaan Ali’s Government has advanced somewhat in that they have requested proposals for the building of an oil refinery in Guyana. It has also made it clear that it is willing to sell its profit oil to the refinery and also allocate land for a refinery.

In a previous letter in the Kaieteur News dated October 11^th and captioned, ‘Why reinvent the wheel when it is already at your disposal?’ I asked why is the Government not dealing with the 6 to 10 proposals that officials of the Government keep talking about. The Minister of Natural Resources has indicated that he has ten proposals. I then suggested that the Government Agencies should have reviewed and evaluated these proposals and give some feed back to the proposers re the merit of their proposals. Why was this not done?

From what has transpired since then I am not sure that the Government really knows how to proceed. They put out a call for an Expression of Interest (EOIs) but soon after they put out Requests for Proposals (RFPs). RFPs are very expensive re finance and use of human resources. “RFPs present specific requirements that help potential vendors determine the best solution for a project” But here the Government is not selling anything or funding a project. My understanding is that if it setting up a project, building something or selling something then they would put out an RSP and they would then clearly define the project and its various components.

It is encouraging interest for a refinery. In this case it should have left it at the stage of EOIs. One would have expected the government to allow the EOIs phase to be completed. ROIs are used to determine potential bidders that have an interest. Request for Qualification would help to narrow the pool of bidders. What I believe the government should have done was to publish the fact that it is desirous of the private sector building a refinery and that it was willing to sell its share of profit oil to the refinery and that the investor/s would receive certain benefits, Tax relief, duty concessions etc.

Any investor desirous of investing would go through the system as all other investors ie Go-Invest, EPA etc etc. The question that arises is if this was going to be a private sector initiative why is the Government stipulating the number of barrels per day (BPD)? Why specify the number of acres 30 acres? Would that not be in the domain of the Investor/s? Why would the government want to limit the refinery to 30,000 BPD? Why is it stipulating the Palmyra area Berbice? Certainly, there are a number of other sites in other parts of the country that may be suitable for the construction of refineries. Investors may decide it would be more feasible to construct a 60,000BPD or even more.

Now the question arises, what would the Minister of Natural Resources do with the 10 proposals that he has. Proposers may have prepared these proposals by expending resources and would certainly have some expectation.

Its not a good for our investment climate to just throw these proposal aside. Who knows how far they have gone in the preparation of their projects. I know that for such projects one has to create a business plan and locate land, and do environmental studies in order to obtain an environmental permit among other things. These are very expensive. They would have gone through the various necessary protocols. So what do we tell them.

I suggest that the Government scrap their request for EOI, scrap their request for RFPs and allow the investors to proceed using Go-Invest and other designated agencies.

A number of refineries have been shut down for various reasons and I think we are looking at about 900,000 barrels a day. So, there is scope for Guyana to become a hub. Today’s modern refineries have been built in keeping with climate change criteria so there should not be too much of a problem. Guyana is in a good position as the transportation of crude would be less. We have one of the best crude. And shipping products to the Caribbean market would also be cheaper. It’s a win-win situation. I suggest that we allow the private sector to go ahead under guidance and that we facilitate the process. So, Mr. Minister call in those investors and chat with them. I would not try to reinvent the wheel.

Regards,

Noonmattie Bharratt

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Why is the Government not dealing with the 6 to 10 refinery proposals

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