The search for a new operator for the Isla Refinery in Willemstad, Curacao, may be on once again as the government’s patience wears thin with its latest preferred partner. Local media reports indicate new tactics could be in store to find an operator for the facility.
Refineria di Korsou, the government agency that owns the refinery, signed a draft deed with a consortium of local businesses – the Curacao Oil Refinery Complex – in May, laying the foundation for the latter to take over.
Talks between the two sides stalled in the past couple of months, after one of CORC’s partners pulled out. And the consortium has yet to meet certain conditions of the agreement. These conditions include showing proof of sufficient money to restart the refinery and obtaining the necessary permits to operate the facility.
RdK originally hoped it could reach a deal before the end of September. According to a Sept. 7 report by the Curacao Chronicle, it looks unlikely a deal will be reached by then, and the government agency appears ready to move on.
Curacao’s Minister of Economic Development, Ruthmilda Larmonie-Cecilia, said RdK is looking to employ a headhunter to find its next partner, according to the report. How the headhunter will be used is set to be drawn out and defined within the coming days. But the main goal is to find an operator with enough crude oil and capital to operate the refinery.
Larmonie-Cecilia indicated the government will soon formally agree on its new direction for the search, and RdK will propose a “headhunting protocol.” Then members will be appointed to a group to supervise the process.
Isla Refinery 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 only intermittently in the past couple of years because of 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.
Negotiations between RdK and CORC 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. 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 company Guangdong Zhenrong Energy was first selected for exclusive negotiations, followed by U.S.-based refiner Motiva then German oil trader Klesch Group. Negotiations with all three companies eventually fell through.