Curacao’s Refineria di Korsou reached an agreement intended to lead to a consortium of local organizations taking over management of the Isla Refinery, potentially ending a years-long saga to find a new operator.
Refineria di Korsou, the government agency that owns the refinery, said Friday that the two parties signed a draft deed that lays the foundation for the consortium – the Curacao Oil Refinery Complex – to take over. A binding closing agreement was also signed, containing conditions CORC must meet before it operates the facility.
Isla Refinery, located in the capital city of Willemstad, is a 335,000 barrels per day fuel refinery that had been operated by Venezuelan state-owned Petroleos de Venezuela S.A. since 1985.
The refinery includes a base oil plant with capacity to produce 5,000 b/d of API Group I paraffinic base oils and 3,700 b/d of naphthenic base stocks.
The facility has run intermittently the past couple of years due to PdVSA’s financial problems and its inability to secure crude oil stemming from legal issues and U.S. sanctions. Concerns have been raised that the facility’s lack of activity could lead to permanent damage to its equipment. The refinery is also a vital part of the local economy.
The deed will be formalized following approval from Refineria di Korsou’s board of directors and the government of Curacao. Officials said CORC must now negotiate with the government of Curacao.
Negotiations between the two sides started at the beginning of the year following a bidding process. CORC is composed of Dick and Doof Contractors B.V., the Petroleum Workers Federation of Curacao and the Association of Employees and Staff of Isla Refinery. Dick and Doof is a Curacao company providing services to the full range of the energy sector and has provided maintenance services at the refinery.
“Both the Management of RdK as well as CORC are pleased to have reached this important agreement regarding the handover of the management and operations of the oil facilities of Curacao while headed toward a new and prosperous future,” Refineria di Korsou stated in a press release.
Curacao began its search for a new operator for the facility in 2017, two years before PdVSA’s lease expired at the end of 2019. Chinese energy company Guangdong Zhenrong Energy was first selected for exclusive negotiations, followed by U.S.-based refiner Motiva and then German oil trader Klesch Group. Negotiations with all three companies eventually fell through.