Isla Talks Stalled by Covid-19

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The Covid-19 pandemic has delayed negotiations toward a final agreement for the Klesch Group to become operator of Curacao’s Isla Refinery, according to local media reports.

Klesch and Refineria de Korsou – the government entity that owns the refinery – had reached a preliminary agreement in December 2019 for Klesch to take over operation Venezuelan-run Petroleos de Venezuela S.A., which has operated the refinery for almost four decades. A report earlier this month by the Curacao Chronicle, however, said that Curacao Refinery Utilities informed employees working at the refinery that the negotiations were impacted. Klesch also indicated the original deadline to finalize the deal, June 30, would not be met due to complications stemming from the coronavirus pandemic, according to the May 7 report.

Curacao Chronicle then reported on May 21 that, according to Refineria de Korsou, negotiations were extended until December.

Klesch is an investment firm and oil trader with one oil refinery in Heide, Germany. The company, with offices in London and Geneva, does not own any lubricant-related assets.

The refinery is currently idle and has been for some time now. PdVSA has been unable to procure crude oil feedstock because of a lawsuit brought by ConocoPhillips in 2018. The suit was settled, but PdVSA continues to be hampered by United States sanctions.

PdVSA has operated Isla Refinery since Shell conveyed it to the Netherlands Antilles – now Curacao – in 1985. Its lease let up on Dec. 31, 2019, but the company and Curacao’s government agreed for PdVSA to continue operations throughout the transition to a new operator. The extension runs up to a year.

Curacao is an island in the southern Caribbean and is a constituent country of the Netherlands.

The Isla Refinery, located in Curacao’s capital Willemstad, has crude oil capacity to process 335,000 barrels of crude per day. It includes a base oil plant that has 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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Caribbean    Region    Regulations    Regulations, Specs & Testing    South America    Venezuela