Friday May 31, 2019 | Office of the Prime Minister
Strategic Review of Petrojam Limited
The Committee’s analysis demonstrates that for Petrojam refinery to become commercially viable, its operating efficiencies must improve, the CAF fiscal regime must be maintained and an investment (Xtra-Light scenario) of approximately US$78M must be made.
The PRC is of the view that transfer of active management of the refinery and terminal to the private sector provides the only credible opportunity to improve the operating performance of both entities while also mitigating the operating and project execution risks to GOJ. Irrespective of GOJ’s policy decision to maintain the CAF Margin or otherwise, the PRC therefore recommends that GOJ exit active management of both the terminal and the refinery through a lease of Petrojam’s underlying assets.
The PRC recommends that the GoJ commission a Petroleum Industry Enterprise Team to chart a course for the government’s exit from the operational management of Petrojam. The Enterprise Team should also engage a suitable transaction advisor such as the International Finance Corporation (IFC) to assist in identifying a suitable lessor with an appropriate PPP transaction framework.