Isla Refinery Talks Fail Again

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Negotiations between Refineria di Korsou and Klesch Group collapsed last week, leaving the tiny island nation once again searching for an operator to take over its deteriorating fuels and base oil refinery.

The government agency that owns the facility reached a tentative deal with the Swiss oil and commodities company in December but announced Friday that discussions have ended, according to reports by multiple new organizations, including the local Curacao Chronicle. Refineria di Korsou said it will immediately begin looking for another company to operate the Isla Refinery.

The agency did not cite a reason for the negotiations to have failed. In May Klesch said they had been delayed by the COVID-19 pandemic. Klesch declined to entertain questions today.

The country, located 40 miles off the northern coast of Venezuela, has tried for the past several years to find a replacement for Petroleos de Venezuela S.A., which has operated Isla for nearly four decades. Klesch is the third company to reach the stage of exclusive negotiations only to back out.

Isla Refinery has capacity to process 335,000 barrels per day of crude per day. 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.

Operations have been halted for at least most of the past year, partly because equipment conditions deteriorated under PdVSA’s management and partly because of problems that PdVSA has faced due to economic sanctions imposed against Venezuela.

As it restarts the search for a long-term operator, Refineria di Korsou said it will also try to operate the facility as a fuels terminal. Curacao considers the refinery an important cog in the country’s economy.

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