(Reuters) Guyana and the Dominican Republic on Tuesday signed a memorandum of understanding to cooperate on recruiting companies to build a 50,000-barrel-per-day refinery in Guyana that would tap the country’s oil wealth.
Any project would be at least 51% owned by the Dominican Republic government, according to the terms of the preliminary agreement, which was seen by Reuters. The pact was signed by Guyana President Irfaan Ali and Dominican Republic President Luis Abinader during Ali’s trip to Santo Domingo.
The Guyanese government has expressed no interest in participating as a shareholder.
Ali said in a message to Reuters that the Dominican Republic is interested in receiving fuel supply from the refinery, which would improve the project’s feasibility.
“(The) Dominican Republic is also interested in exploring for oil, food production and petrochemicals,” in Guyana, Ali added without providing details.
Prices for the supply of crude oil to the refinery would be negotiated by the project’s parties under a 30-year contract, according to the agreement.
As domestic oil output expands rapidly in the South American country with the target of reaching 1.2 million barrels per day (bpd) by 2027, the Guyanese government is trying to attract investors for facilities capable of securing stable fuel supply domestically, while reducing dependence on imports.
Guyana is wholly reliant on imported fuel for motor vehicles and power generation.
The potential alliance with the Dominican Republic is for a second refinery project in Guyana. Authorities are reviewing bids from four contenders for a separate 30,000 bpd modular refinery.
For both refineries, crude is expected to come from Guyana’s share of oil produced by a consortium led by Exxon Mobil XOM.N that has discovered more than 11 billion barrels of recoverable oil at the Stabroek offshore block.