Global shocks reignite push for local oil refinery

Apr 16, 2026 News

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…Guyana in talks with DR – Pres. Ali

(Kaieteur News) – Amid global supply chain disruptions and rising fuel costs, Guyana and the Dominican Republic (DR) are advancing discussions on establishing a local oil refinery, as part of a broader strategy to shield from external shocks.

Speaking during a special edition of ‘Tea on the Terrace,’ President Irfaan Ali on Wednesday disclosed that he had discussions with President of the Dominican Republic, Luis Abinader in regard to having an oil refinery in Guyana.

The renewed focus for a local refinery comes amid ongoing geopolitical conflicts that have rattled global energy markets and driven up transportation and logistics costs.  “We’re in serious discussion back to have a refinery here in Guyana for national security and the fertiliser plant for national and regional security…we have to now use this as an additional step in the learning curve that the entire world is going through. The entire world is reorienting its system as a result of what is taking place,” Ali said.

Guyana and DR had signed a Memorandum of Understanding (MoU) dating back to 2023.  The signing of the MOU had spurred deliberations about establishing an oil refinery in Guyana capable of refining approximately 50,000 barrels of oil daily. It was reported that DR is poised to hold a controlling stake of 51% in this collaborative endeavour.

Ali on Wednesday, reminded that the PPP government is already investing in domestic energy infrastructure, including the Wales Gas-to-Energy project and gas bottling facilities, to reduce dependence on imports.  “In Guyana, the long-term investments that we are making in our own gas plant and gas bottling plant will see us building up internal capacity withstand certain shocks because we’ll have our own natural gas,” he said.

He stressed that these measures are expected to create more predictable conditions for key sectors.  “We’ll control the price of energy by managing through our own natural gas, bringing down the cost of energy by half. So that we will have stable fertiliser, stable gas, stable industrial and manufacturing opportunities because we manage and we’ll be able to manage the cost of our own power…” Ali added.

In October 2022, government issued a call for Request for Proposals (RFP) for the design, finance and construction of an oil refinery. Kaieteur News had reported that the proposed facility will be designed to process 30,000 barrels of oil per day and be located on land provided by the government at the mouth of the Berbice River in the vicinity of ‘Crab Island’.

The government’s RFP had said it expects construction to start by the first quarter of 2023 with project completion no later than two years after start date.

Importantly, government said it will provide several incentives to the successful company. Along with the estimated 30 acres of land to be provided, government said it will also offer generous fiscal incentives for the project including a 10-year tax holiday, supply of feedstock (oil) from the Guyana Government’s share of profit oil at market prices, and access to the domestic market for sale of refined products (if desired).

It was proposed that the project will be strictly financed and owned 100% by the private sector, as the government will not have any ownership or investment interest in the project. Several companies had submitted their proposals to the National Procurement and Tender Administration Board (NPTAB). However, the government never moved ahead with the project.

Back in 2024, Minister of Natural Resources Vickram Bharrat had stated that the construction of an oil refinery was not feasible at the time. However, he stressed that Guyana would have sufficient crude to feed a 100,000 barrel per day refinery when the number of Floating Production, Storage, and Offloading (FPSOs) reaches five or six.

To date, Exxon is producing over 900,000 barrels of oil per day from four FPSOs. ExxonMobil Guyana Limited (EMGL) operates the Stabroek Block in partnership with Hess and CNOOC. Oil production commenced in December 2019 and to date nears a million barrel per day.  By 2030, ExxonMobil Guyana expects to have total production capacity of 1.7 million oil equivalent barrels per day from eight developments.

Kaieteur News recently reported that Guyana is also considering the possibility of collaborating with the government of Trinidad and Tobago on the possibility of Guyana’s crude being used to support the restart of Trinidad’s idle refining capacity.

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• gas shortage, Iran war, oil, oil blockasde, oil refinery

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