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By Neil Marks

THE Government has signed a Memorandum of Understanding (MOU) with Crab Island Refinery Incorporated (CIRI), a company with Guyanese Romeo Cipriani as President, to set up an oil refinery at Crab Island in the Berbice River, which would see an eventual investment of US$500M.

Prime Minister Samuel Hinds, in a press release yesterday, said the refinery is projected to be built in stages with an initial capacity of about 20,000 barrels a day of crude rising to 100,000 barrels a day by five years.

It is envisaged that construction could start within nine months with eventual employment of 1,000 persons. First production could start within a further 15 months, the Prime Minister said.

“There is a need for such a refinery in Guyana. Energy is a lifeline of any country and this could be better if you have cheap energy, reasonably priced energy,” Mr. Cipriani told the Guyana Chronicle of his decision to get involved in the project.

A Berbician, Cipriani is the sponsor and developer of the project and his financial partners are Israelis based in the USA and Americans as well. An engineer, he comes from long years of involvement in oil refineries and construction.

“Guyana has still not hit the jackpot, in terms of finding oil. The misconception is sometimes that you can’t have a refinery if you don’t have crude. There are a lot of places in the world there are refineries where crude doesn’t exist,” he said.

Cipriani’s refinery would purchase crude petroleum on the world market and sell its products on the world market.

“The refinery will be a commercial operation: purchase of any crude petroleum that might be produced by anyone in Guyana is neither required nor excluded; similarly, sales of products into Guyana are neither required nor excluded. However, any sale into Guyana must satisfy all taxes in Guyana,” the Prime Minister noted.

Cipriani told the Guyana Chronicle sales to Guyana would be competitive and marketing CIRI’s products would not be an issue, with a potential buyer already barrelled.

The Government, having some 12 years ago assisted the bauxite industry in the Berbice River in establishing the first stage of a deep water harbour in the mouth of the Berbice River (the Berbice deep water shipping facility), and noting the availability of a large area of undeveloped land on the right bank north of the Canje Creek, has been conscious of and has been pursuing possibilities of developing a deep water harbour and export processing zone there.

“One could imagine the development of storage areas for the large quantities of goods, solids and liquids and containers, to be passed across the docks. In addition, there are areas for constructing plants to process imported and local materials like crude petroleum or bauxite, for export.

“More particularly, the Government noting the often expressed need for the establishment of new petroleum refineries in the Western hemisphere, has been promoting this area as an area to be considered for locating new petroleum refineries,” the Prime Minister said.

CIRI expressed such interest since 2003 and recently brought a likely principal investor and refinery operator to meet the Guyana Office for Investment and the Prime Minister.

The MOU memorialises the representations of CIRI, the concessions available in law which CIRI will enjoy, and a commitment from the Government to make land available.

Mr. Hinds noted that other interests have been expressed in establishing petroleum refineries in that location “and the Government continues to welcome all interests.”

Guyana Chronicle