Guyana signs MoU with Dominican Republic for 50,000 barrel per day refinery

Aug 09, 2023 News

Kaieteur News – Guyana and the Dominican Republic took a significant step in energy cooperation by signing a Memorandum of Understanding (MoU) yesterday. The MoU focuses on identifying competent public or private entities from both nations eager to construct an oil refinery in Guyana. This refinery is projected to have a refining capacity of a minimum of 50,000 barrels of crude oil daily.

As per the agreement, the Dominican Government, potentially along with private investors, will hold a majority share of at least 51%. It is noteworthy that the Guyanese Government has opted not to seek a shareholder stake in this venture.

The MoU further elaborates on the pricing for the light crude supply to the refinery. The price, which will be finalized during further negotiations, will be set for a 30-year duration. Moreover, the two countries will collaborate to decide on the most optimal location for the refinery within Guyana.

President Dr. Irfaan Ali and Luis Abinader Corona of the Dominican Republic endorsed the MoU, emphasizing the pressing need for the Region to ensure a reliable and steady fuel supply, aiding in the growth of both countries, CARICOM, and the broader Caribbean.

The shared sentiment is that the Dominican Republic can leverage Guyana’s sovereign natural resources, benefiting CARICOM members and other Caribbean nations. Both countries are also aligned in their vision of fostering energy security through mutual cooperation, which will resonate throughout CARICOM and the Caribbean region.

Both leaders have also acknowledged that the potential refinery holds promise for CARICOM and the Caribbean at large. It is believed that it could bolster regional energy security, diminish reliance on external fuel sources, and spur industrial and economic growth in nearby nations. The success of this project may also present benefits for other Caribbean countries.

The MoU, valid for five years and subject to automatic renewal, also underscores a lasting commitment between the nations. However, termination can be initiated by either party with a six-month notice prior to the expiration.

Indeed, this collaboration hints at Guyana’s broader energy ambitions, as it marks their second pursuit of an oil refinery. It should be noted that the government is currently evaluating bids for a modular refinery which would be designed to use 30,000 barrels of oil per daily from the oil-rich Stabroek Block.

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Dominican Republic, Guyana, Memorandum of Understanding, refinery

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