Dominican Republic and Guyana Close New Energy Deals

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Researched by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--The Dominican Republic and Guyana have signed memorandums of understanding (MOUs) for the construction of a refinery, a petrochemical complex, and oil exploration agreements.

On Tuesday, the Presidents of the Dominican Republic and Guyana signed MOUs related to energy developments in Guyana.

As part of these agreements, the government of the Dominican Republic will evaluate the possibility of constructing a refinery in Guyana, and it will own 51% of its shares. The government is looking for private partners for the construction of this asset, according to the government's statement.

Based on information published by Reuters, the refinery will have a capacity of 50,000 barrels per day (BBL/d).

Guyana currently has oil production of about 400,000 BBL/d, and it expects to reach a total output of 1.2 million BBL/d by 2027 with the installation of new floating production storage and offloading (FPSO) units by Exxon Mobil Corporation. Over the years, ExxonMobil and other companies have made dozens of oil discoveries offshore Guyana, raising the country's energy prospects.

Despite the increasing oil production and discoveries, the South American nation still lacks a refinery to process its output and provide refined products for the domestic market.

Currently, the Guyanese government is accepting bids for constructing a 30,000-BBL/d refinery in Crab Island, though it has yet to announce the results of this bidding process.

Besides constructing a refinery, the two countries signed an MOU for a new petrochemical plant in Guyana. The government of the Dominican Republic would also own 51% of this asset, which will aim to generate urea for agricultural production.

Additionally, the nations signed an agreement to study the opportunity for oil exploration in a Guyanese oil block. The conditions of this agreement would be similar to those operated by private companies in Guyana. No detailed information on this section was offered by the Dominican government.

"I don't remember an agreement between two countries more important than this, where we are going to be allowed to exploit an oil block, in a government-to-government agreement, have a majority stake in a refinery and a petrochemical company, but at the same time to serve to have energy and food security for the country of Guyana," said the Dominican President Luis Abinader.

For its part, Guyana has continuously sought to expand its oil and gas sector. As a result, the South American nation is in the process of auctioning 14 offshore blocks to further develop its hydrocarbons industry. The winners of the auction will be announced this November.

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