Search for Isla Operator Restarts Yet Again


Search for Isla Operator Restarts Yet Again
Sunset from Fort Nassau views around the Caribbean island of Curacao, including Isla Oil Refinery. © Gail Johnson

The Curacao government is again going back to step one in its effort to find a replacement operator for the Isla Refinery after talks broke down yet again with a preferred bidder.

The search, which has gone on for five years, will begin again following an announcement the government would no longer negotiate with the three companies that were finalists in the latest round of bids.

Refineria di Kursou, the Curacao government agency that owns the Isla Refinery, had entered exclusive negotiations in June with a consortium named Caribbean Petroleum Refinery. Originally it aimed to finish those talks and ink an agreement by September of last year.

CPR is comprised of six United States companies and one Brazilian company that the government agency never identified.

Negotiations hit a snag when RdK said in December that one of the possible investors of CPR provided dozens forged documents, including a letter from a London-based international bank stating that investor had extensive funds to support the restart and operation of the refinery. The bank denied writing the letter.

RdK initially said it would give CPR the “benefit of the doubt” after determining the group itself hadn’t forged the documents and continue negotiations in good faith, but then informed the consortium in February it was no longer considered the preferred bidder.

The other finalist bidders, Porto Kòrsou and Grupo Internashonal Kòrsou, expressed interest in another chance at negotiations after the fallout with CPR, but the agency eventually decided to start the process from scratch.

The process of finding a preferred bidder can take a year or more. Before the latest search, talks with local consortium CORC began in Jan. 2021 then stalled in Sept. 2021. From there, RdK announced in Jan. 2022 that it had selected a number of potential operators out of 20 that showed interest, providing those potential operators with information about the refinery and allowing them to tour the facilities.

Previous rounds of efforts to choose an operator each also led to negotiations with preferred bidders – all of which came to naught. Those companies 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 the deals fell through for various reasons.

State-owned Petroleos de Venezuela S.A. operated the refinery from 1985 until 2019, though the facility was idled beforehand due to economic sanctions imposed against Venezuela and a failure to secure crude oil after U.S. oil company ConocoPhillips sued PdVSA over a disputed payment. Isla Refinery is a fuels refinery with capacity to process 335,000 barrels per day of crude oil. It 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.