Refinery and better oil deal

Aug 29, 2026 Editorial, News

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(Kaieteur News) – President Irfaan Ali is right about one thing: Guyana cannot continue producing millions of barrels of crude oil while importing virtually all of its refined petroleum products and pretending that this is a secure energy position.

“We cannot have crude oil and not have security of supply,” the President said recently, arguing that a refinery and adequate fuel storage would provide Guyana with greater protection against global shocks. We agree. A refinery, coupled with meaningful strategic fuel reserves, could provide a measure of energy security, reduce exposure to international price disruptions and potentially position Guyana as a supplier of refined products to the Caribbean.

But there is a larger question which President Ali continues to avoid. Why is the Government so enthusiastic about spending billions of US dollars on another megaproject while remaining unwilling to confront the glaring deficiencies of the 2016 oil agreement?

The President spoke of “imported price differentials” and the impact of global events on fuel prices. Yet the financial consequences of Guyana’s lopsided oil contract with ExxonMobil dwarf whatever savings a refinery could generate for consumers. The contract has already allowed ExxonMobil to recover enormous costs while Guyana remains bound to terms widely regarded as exceptionally favourable to the oil companies.

This is where the Government’s priorities appear misplaced. President Ali once campaigned on promises to review and renegotiate oil contracts. Today, he invokes the “sanctity of contract” whenever the subject of revisiting the ExxonMobil agreement arises. That contradiction deserves an explanation.

If the Government is serious about shielding Guyanese from external shocks, then securing a substantially better return from the country’s most valuable natural resource should be at the very top of its agenda. A refinery may save money on imported refined products. A fairer oil agreement could generate vastly greater revenues for the country. The two objectives are not mutually exclusive. Guyana can pursue a refinery while demanding a better deal from ExxonMobil. What is unacceptable is presenting the refinery as though it represents the principal answer to Guyana’s economic vulnerability.

There is also the question of execution. Guyana has become accustomed to hearing grand announcements about transformational projects, only to watch costs escalate, deadlines slip and basic questions about transparency go unanswered. The US$2 billion Wales Gas-to-Energy project remains a painful reminder. If a refinery is now being contemplated, citizens have every right to ask: How much will it cost? Who will finance it? Who will own it? Who will operate it? What will be its refining capacity? What are the projected returns? How much will consumers actually save? And, critically, what safeguards will prevent the project from becoming another expensive burden on the Treasury?

The President has indicated that there is interest in investing in a refinery and has pointed to discussions with the Dominican Republic, including the possibility of a facility capable of refining about 50,000 barrels per day. Those discussions must be conducted in full public view. Guyanese must not learn the details of another multibillion-dollar undertaking only after the critical decisions have already been made.

A refinery can be good for Guyana. Strategic fuel storage can be even more important. A national oil company could potentially strengthen the country’s position across the energy supply chain. These are serious propositions worthy of serious consideration. But Guyana must not confuse activity with progress. The Government must first establish that the refinery makes economic sense, that the country will receive genuine value for money, and that the project will not become another opaque megaproject characterised by escalating costs and unanswered questions.

And while doing so, President Ali should return to the matter that remains at the heart of Guyana’s oil future: the contract. If the Government truly wants to protect Guyanese from external shocks and maximise the benefits of the country’s oil wealth, it should pursue energy security on two fronts—build the infrastructure necessary to secure fuel supplies, and secure a fairer share of the wealth beneath our waters. A refinery can provide a cushion. A better oil deal can transform the country. Guyana needs both, but it should not sacrifice one while pretending the other is enough.

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• Editorial, Guyana Oil, oil deal, oil refinery

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