Guyana signs MoU with Dominican Republic for Petrochemicals Plant, Oil Exploration

Aug 10, 2023 News, Oil & Gas

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Kaieteur News – The Governments of Guyana and the Dominican Republic on Tuesday signed six Memoranda of Understanding (MoUs).

The signing of the MoUs, which concern oil exploration, agriculture, tourism, bilateral investments, as well as the establishment of an oil refinery and petrochemicals plant, follows President Irfaan Ali’s visit to the Spanish-speaking country.

In one MoU, the two nations have agreed to seek investors from both countries to collaborate on the establishment of a 50,000 bpd refinery in Guyana. Dominican partners will have a majority 51 percent stake, while the Guyanese government indicated it would not participate as a shareholder.

Another MoU focuses on the potential for setting up a petrochemical plant, seeing it as an avenue for economic growth, job creation, and fortifying the industrial infrastructure for both nations and the region. Recognizing the importance of the petrochemical industry in transforming crude oil and natural gas into vital products like urea, asphalt, and fertilizers as well as the potential to satisfy the current demand for these products regionally, both have committed to identifying qualified companies capable of constructing this plant, with the Dominican government holding at least 51% of the shares.

Dr. Irfaan Ali, and the Dominican Republic’s Head of State, Luis Abinader also inked an MoU focusing on the joint development and exploitation of petroleum resources. They intend to establish a working group to negotiate exploration licenses in Guyana and hope to develop a free trade area between the Dominican Republic and the Caribbean Community to further economic balance.

In yet another MoU, the nations are exploring collaborative efforts in agriculture. The initiative encompasses the joint production of corn, soybeans, and other agricultural products like sugar and spices. There is also a focus on the poultry industry, aiming for synergy between both countries. The agreed-upon agricultural projects could utilize up to 100,000 hectares of Guyanese territory.

The MoU between the Guyana Office for Investment and ProDominicana, the Dominican Republic’s main authority on investment promotion, also outlines a mutual exchange of information on investment activities. The intention is to identify collaboration opportunities and aid potential investors in understanding legislation and regulations in both nations.

Lastly, in a MoU between Guyana’s Minister of Tourism, Industry and Commerce, Oneidge Walrond, and her Dominican counterpart, David Collado Morales, both parties committed to promoting tourism. They will exchange information and strive to boost tourist numbers through joint marketing campaigns and participation in international tourism exhibitions.

With these agreements, both nations aim to foster deeper bilateral relationships, promising economic growth and regional collaboration in the years ahead.

Meanwhile, in a statement, the Office of the President said that the MoU signed between Guyana and the Dominican Republic will create strong and significant value for both countries, ultimately positioning them as leaders in food and energy security beyond the Caribbean Region.

President Ali, who is leading a delegation to the Dominican Republic for an Official Visit, said the MoUs allow the states to demonstrate their “collective resolve in addressing some of the major crises our region and the world is facing today.”

He emphasized that the MoUs offer prospects of tremendous value creation that will benefit the citizens of both nations.

“The value creations in these agreements are enormous. The value creation, of course, would lead to job creation. And not only the issue of job creation should be looked at in the value of jobs. But we’re talking about specialized jobs, more highly skilled jobs, that will be created out of these joint initiatives,” President Ali said.

This partnership, according to the Head of State, will see the transfer of technology, knowledge, and the integration of markets, food systems and agriculture portfolios. He explained that “there’ll be no conversation on food security, especially in this region, without the two countries being a part of it”.

Similarly, on the energy security front, the Guyanese Head of State said the collaboration between the two countries will allow them to be leaders, forging an alliance through which investment and expertise from the Dominican Republic will finance and support the necessary infrastructure in Guyana.

Explaining the potential benefits of the agreements, President Ali said the energy market will not only be between the two countries and the Caribbean Region but will expand to northern Brazil, where there is a substantial market.

“So now, with the technology you have, with the capital you have, and with these MoUs, that possibility becomes very real…”

Meanwhile, the President highlighted that alongside efforts towards achieving these goals, discussions have also focused on security cooperation between the two nations. The Guyana Defence Force and the Guyana Police Force have initiated engagements with their Dominican Republic counterparts to explore opportunities for increased collaboration.

He revealed that there has been a significant increase in trade as imports of products between the two countries have been climbing, signalling a positive in the partnership.

President Ali noted that the relationship between Guyana and the Dominican Republic “is built on sustainability, resilience, and a thorough understanding as to the challenges we both face, now and in the future, as to countries, but more importantly, as a region.”

The identification of the common values, understanding and the need for advancing development, President Ali said, are pillars which have led to accelerated partnership through which the people of both countries stand to benefit enormously.

President Ali highlighted that the Guyanese private sector will benefit significantly from the new partnerships, adding that with the agreements in place, Guyanese businesses will have new access to capital, technology, knowledge, and access to big markets and other opportunities. Another plus for the local private sector, His Excellency said, is “the commitment of both sides to remove all barriers and advance this relationship…”

“…In this new emerging relationship, it is important that we, at the level of government, send the right signal ensuring that both at the government level and the private sector level, we demonstrate a relationship that is built on trust, confidence, and tone that we set is imperative for the joint collaboration of our private sectors,” President Ali stressed.

Working groups have also been established with the aim of advancing the objectives set out in the agreements.

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• Industry and Commerce, Memoranda of Understanding (MoUs), oil, Oneidge Walrond, Plant, Tourism

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