Consortium Seeks Isla Refinery Deal

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Consortium Seeks Isla Refinery Deal
A view of Isla Refinery in Curacao. © TamasV

Refineria di Kursou, the Curacao government agency that owns the Isla Refinery, entered exclusive negotiations with a hefty consortium of companies to finally find an operator for the scarcely used facility. The agency described investments that the consortium proposed both for the restart of the facility and the local community.

The Caribbean Petroleum Refinery is a group consisting of six companies from the United States and one from Brazil. “This consortium will have strategic alliances with several major oil and gas companies,” the agency said in a press release issued June 20. Refineria di Kursou declined to disclose the companies involved.

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The consortium wants a 30-year lease with an option for an additional 10 years.

Caribbean Petroleum Refinery projects an investment of U.S. $650,000 in the first three years for repair and revision work, and to safely start up the facilities. The refinery will be converted to run on gas. Beyond the operational restart of the site, Caribbean Petroleum Refinery will reopen the vocational school of the refinery and invest in sport development and schools in Curacao.

A team representing the Curacao government and Refineria di Kursou will begin negotiations with the consortium starting this week. The agency said it was sticking with its original date of Sept. 1 of this year to reach an agreement and immediately begin the process of restarting the facility.

Refineria di Kursou said the companies are represented in negotiations by Socap Corp., a business consulting firm from Weston, Florida.

More than 50 companies showed interest in operating the facilities, of which a select number were chosen by a committee to continue with the process. Final proposals from those companies were due by the end of March. Three companies submitted proposals.

While the last few attempts to find a partner required virtual data and tours of the facility because of the pandemic, this time interested companies could visit the refinery in person for an in-depth inspection.

The previous preferred bidders over the past five years were local consortium CORC, German oil trader Klesch Group, U.K.-based SPS Drilling E&P, U.S.-based Motiva and Chinese company Guangdong Zhenrong Energy.

CORC, Klesch Group and SPS Drilling each signed a lease agreement, but all deals fell through for various reasons.

State-owned Petroleos de Venezuela S.A. operated the facility until 2019, though the refinery was idled beforehand due to economic sanctions imposed against Venezuela and a failure to secure crude oil after ConocoPhillips sued over a disputed payment.

Isla Refinery is a 335,000-barrels-per-day fuel refinery that had Venezuelan state-owned PdVSA operated 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.

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