Offshore Technology

Daily Newsletter

09 August 2023

Daily Newsletter

Dominican Republic signs MoU to explore refinery construction in Guyana

The Dominican Republic Government could own a majority stake of at least 51% in the refinery project.

Guyana has signed a memorandum of understanding (MoU) with the Dominican Republic to explore the construction of a 50,000 barrel per day (bpd) refinery in Guyana, reported Reuters.

The preliminary agreement was signed by Guyana President Irfaan Ali and Dominican Republic President Luis Abinader at a meeting in Santo Domingo, Dominican Republic.

As per the terms of the agreement, the Dominican Republic Government could own at least a 51% stake in the refinery project.

The Guyanese Government, however, is considering no participation as a shareholder in the refinery project.

Ali was cited by Reuters as saying that the Dominican Republic would receive fuel from the proposed refinery. This could improve the feasibility of the project.

Ali was quoted by News Room as saying: “The DR [Dominican Republic] as an offtaker improves the viability and feasibility of the project, which can be an important part of the energy matrix in the region.”

The project's parties will negotiate the prices for the crude oil supply to the refinery under a 30-year contract.

Ali said: "(The) Dominican Republic is also interested in exploring for oil, food production and petrochemicals," in Guyana.

By 2027, the Guyanese Government aims to reach 1.2 million barrels per day of capacity. It is seeking investors for facilities capable of securing domestic fuel supply and helping reduce dependence on imports.

Separately, Guyana is assessing bids from four parties for the development of a separate 30,000bpd modular refinery.

The two proposed refineries are expected to receive crude from Guyana's share of oil produced at the Stabroek offshore block, which is owned by an Exxon Mobil-led consortium.

ESG 2.0 marks a shift towards stricter environmental rules

ESG is moving into a different era, which we call ESG 2.0. While ESG 1.0 was driven by voluntary corporate action, spurred by pressure from activist consumers and investors, ESG 2.0 is being driven by a new wave of government policies. The EU has taken the regulatory lead, with rules introduced or in the pipeline that will price emissions, regulate the use of the terms ‘ESG’ and ‘sustainability’ in marketing materials, and make ESG reporting mandatory. The US has taken a different approach, favoring less regulation and more financial support in the form of tax breaks for clean industry (renewables plus nuclear and hydrogen). China is planning to expand its emissions trading system to more sectors, decarbonize its heavy industry, and ramp up its use of renewables. The new policy direction is mainly motivated by the ambition to hit net zero emissions targets. But on top of this, governments are now competing for clean industry and trying to challenge China’s leadership on the production of the world’s green technologies such as solar panels and batteries, as well as the production and refinement of materials needed for energy transition such as lithium. These driving forces are leading to policy that will impact every sector, not just heavy industry, and will keep ESG near the top of the regulatory agenda over the longer term.