Refineria di Korsou – the Curacao government entity that owns the Isla Refinery – issued non-exclusive letters of intent to multiple prospective operators of its sparsely run facility, the entity announced last week, taking one more step toward choosing a final preferred operator.
The Project Management Organization – installed by RdK to lead the search for an operator – will now work toward a binding proposal with companies that sign the letter of intent, with negotiations to begin afterward. RdK projects negotiations will take place over the next few months with the goal of coming to an agreement with a preferred operator in November or earlier, sticking to its previously announced timeline. The letters of intent issued this month are also in accordance with the company’s timeline.
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The organization just last month issued 10 process letters with guidelines for non-binding proposals, but did not disclose the number of companies that actually submitted a proposal. At the time, Marcelino de Lannoy, head of the refinerys negotiation team, told Lube Report, “We are happy with the response received.”
The Isla Refinery is currently operated by struggling Petroleos de Venezuela S.A., which has been unable to procure crude oil to operate its units at the refinery since ConocoPhillips brought legal action against the state-run oil company.
Though the two organizations eventually settled, sanctions against the cash-strapped PdVSA have continued to prevent the refinery from receiving any crude oil. PdVSA has operated Isla Refinery since Shell conveyed it to the Netherlands Antilles – now Curacao – in 1985, and its lease runs out at the end of this year.
It has been a long process to get to this point. Ongoing since 2013, the search for a new operator looked to be coming to a close this past December when the refinery chose a preferred company, which a Curacao news organization identified as Houston-based Motiva Enterprises. But the preferred bidder withdrew from negotiations after a corruption probe was launched into the selection process. The bidder cited a delay in negotiation and the refinery’s review of other opportunities for its withdrawal, according to the refinery.
De Lannoy told Lube Report the probe concluded that no fees were transferred for preferential treatment, though three workers were dismissed from the company due to violation of its rules of conduct.
Curacao is an island located in the southern Caribbean and is a constituent country of the Netherlands.
The Isla Refinery, located in Curacaos capital Willemstad, has crude oil production capacity of 335,000 barrels per day. The refinery includes a base oil plant that has capacity to produce 5,000 b/d of API Group I paraffinic base oils and 3,700 b/d of naphthenic stocks.