Guyana cautiously weighing refinery proposals

Spanish Market: Crude oil, Oil products
08/12/21

Guyana is considering "more than 10" proposals from foreign companies to build and operate an oil refinery but the government is in no hurry to have one, natural resources minister Vickram Bharrat told Argus.

The government is "cautious" about accepting any of the proposals, "but at some point, we will start that discussion," Bharrat said, without naming any of interested parties.

The prospect of a refinery was raised in a meeting with President Irfaan Ali last week by a group of Mexican firms led by infrastructure developer Grupo Omega, according to Ali's office.

"We have been looking at all the proposals, but we are yet to determine whether we want a refinery, when we want it and what size it will be," Bharrat said. "The prospect of a refinery is still on the table."

The refinery debate is taking place as ExxonMobil works to ramp up deepwater crude production from the Stabroek block to 800,000 b/d by 2026. Current output of 120,000 b/d is all exported.

ExxonMobil increased its estimated recoverable resources from Stabroek by 1bn bl of oil equivalent (boe) to 10bn boe, the company in October.

Guyana supports the construction of an oil refinery, but it will have to be done by private-sector investors and not the government, Ali had said in April 2021.

A refinery would "add value" to the country's oil sector, he said. But the government is cautious in light of problems in nearby countries such as Trinidad and Tobago, where a refinery was forced to close because of a shortage of local feedstock. Refineries have also closed in the US Virgin Islands and the Dutch-controlled islands of Curacao and Aruba.

"If you have the refinery, you must be able to guarantee crude," Bharrat said. "If you can't then you have to import, and that is more expensive, so we are not rushing on this."

Guyana imports about 15,000 b/d of oil products, according to official data.

By Canute James

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18/09/24

TMX is a fossil fuel subsidy of at least C$8.7bn: IISD

Calgary, 18 September (Argus) — Canada's newest crude pipeline to the country's west coast amounts to a fossil fuel subsidy of at least C$8.7bn ($6.4bn), a research and policy think-tank said. The federal government is unlikely to recover its C$34bn investment to construct the 590,000 b/d Trans Mountain Expansion (TMX) connecting oil producers in Alberta to the Pacific coast, qualifying the project as a major subsidy for the fossil fuel industry, according to the International Institute for Sustainable Development (IISD) on Wednesday. This runs contrary to the government's policy to eliminate direct support for the oil and gas sector , a goal Justin Trudeau's Liberals said was achieved in 2023. The government was the first G20 country to hit this milestone, following a 2009 commitment by the group to reach the goal by 2025. The subsidy as it relates to TMX could be as high as C$18.7bn, the Canadian non-profit said, but noted the entire amount could still be recovered by increasing tolls and/or implementing a levy. This levy could be against either all producers, or all shippers, of crude in the Western Canadian Sedimentary Basin (WCSB), whether they use TMX or not, the IISD suggested. About 90pc of Canada's crude production comes from western Canada, with much of that derived from Alberta's oil sands region. "A levy in the range of C$1-2/bl . . . over a 10-year period would be sufficient to recover the entire cost of the subsidy and the loss to the Canadian taxpayer," according to the IISD. Alternatively, fixed tolls on TMX would need to be more than doubled to C$24.53/bl from C$11.37/bl to recover all capital costs for the line that went into service on 1 May this year, according to IISD's figures. Variable tolls would be added to this. The terms in the original contracts signed between shippers and then-owner Kinder Morgan were no longer appropriate as they did not reflect the rising risks of the project, said the IISD. Kinder Morgan suspended the project in 2018, which led to the Canadian government buying both the expansion project and the original 300,000 b/d Trans Mountain line from US midstream company that same year. The federal government has maintained its plan to sell the pipeline once operational, but the final tolls are yet to be determined. Whether the operator or shippers will bear the brunt of the massive cost overruns is also still unknown. Tolls, representing cash flows for any prospective buyer, will help dictate the price that the expanded Trans Mountain system will fetch. The IISD suggests a sale price is likely to be between C$17.6bn-26.6bn, resulting in a net loss to the government of between C$8.9bn-18bn assuming its cost of investment climbs to nearly C$36bn before a sale is reached. But despite warnings by opponents it would go underused, TMX has been as advertised, opening a new frontier for oil sands operators and disrupting trade flows throughout the Pacific Rim. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Indian windfall tax on domestic crude output at zero

18/09/24

Indian windfall tax on domestic crude output at zero

Mumbai, 18 September (Argus) — India has reduced the windfall tax on domestic crude production to zero from a previous 1,850 rupees/t ($3/bl), in line with a fall in global oil prices. The new rate is effective from 18 September. The rate was last revised on 31 August when it was cut by 12pc . The rate is revised every two weeks. Global crude prices fell nearly 9pc during 1-18 September. The windfall tax was cut to zero during 4-19 April and 16 May-15 July 2023. The Indian government first imposed the windfall tax in July 2022 because of a sharp increase in crude prices that led to domestic crude producers making windfall gains. Indian producers sell crude to domestic refineries at international parity prices. India's crude production in August fell by 4pc from a year earlier to 520,000 b/d, oil ministry data show. Crude imports in August fell by 8pc from July and by nearly 1pc against a year earlier to 4.22m b/d in August, Vortexa data show. India has again extended a deadline to 21 September for submitting bids for the ninth bidding round under the Hydrocarbon Exploration and Licensing Policy's Open Acreage Licensing Programme, as it attempts to boost investment to lift domestic upstream output. By Roshni Devi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

USCG updates ongoing lower Mississippi restrictions

17/09/24

USCG updates ongoing lower Mississippi restrictions

Houston, 17 September (Argus) — The US Coast Guard (USCG) will further limit northbound movement for barges transiting the lower Mississippi River despite slightly higher water levels following Hurricane Francine's landfall late last week. The USCG announced on 16 September that all northbound traffic traveling from Tunica, Mississippi, to Tiptonville, Tennessee, can only have five barges wide and only four of those can be loaded. Barges also cannot be loaded deeper than 9.5ft. Any southbound traffic from Vicksburg, Mississippi, to Tunica cannot move more than seven barges wide or be drafted deeper than 10.5ft. Southbound traffic from Tiptonville to Tunica can only be six barges wide or less and cannot have a draft greater than 10ft. The USCG has updated lower Mississippi river draft restrictions about four times since the end of August, but this is the third year in a row of notable low water for the fall on the lower Mississippi river which has triggered draft restrictions to arrive more quickly than previous years. Hurricane Francine brought significant rainfall to the lower Mississippi at the end of last week . But this has not eased the minds of mariners, who anticipate the water may leave as quickly as it arrived. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

California regulator floats future LCFS linkage

17/09/24

California regulator floats future LCFS linkage

Monterey, 17 September (Argus) — California would welcome bringing US low-carbon fuel standard (LCFS) programs together in a common market, one of the state's top regulators said on Tuesday. Such a linkage is unlikely to occur in the near future, but California Air Resources Board (CARB) deputy executive director Rajinder Sahota said it is something worth pursuing. "I totally think we should link our LCFS programs," she said at the Argus North American Biofuels, LCFS and Carbon Markets Summit in Monterey, California. Sahota said California and other LCFS states are working on a system that could allow the trading of compliance credits between companies covered by each program, but did not provide any other details. Her comments mark a change in tenor from CARB, which historically has said a linkage would be difficult given the differing starting points and carbon intensity targets of each program. Oregon's Clean Fuels Program (CFP) started five years after California's LCFS, while Washington launched its Clean Fuel Standard just last year. New Mexico is working on its own program that will begin by 2026. Oregon and Washington regulators at the conference said there have not been any formal discussions about a linkage, but did not completely dismiss the idea, highlighting the close informal coordination between the states. "All puzzles can be solved eventually," said Bill Peters, interim director of the CFP. By Michael Ball Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

California still eyeing 2025 start to LCFS changes

17/09/24

California still eyeing 2025 start to LCFS changes

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