PdV makes bid to keep Curacao assets

Venezuela's state-owned PdV is making a another bid to extend its operating lease for a refinery and deepwater terminal in the Dutch-controlled island of Curacao.

Oil minister and PdV chief executive Manuel Quevedo has proposed to Curacao a short-term lease extension of at least one year, a Venezuelan oil ministry official confirmed.

Curacao's government has expressed eagerness to sever ties with PdV, and island officials have thrown cold water on Venezuela's effort to hang on to the assets, which they say have not been maintained. The refinery has been mostly dormant in recent years, hurting the local economy.

The Bullen Bay terminal had been mostly quiet as well until a [cargo of Venezuelan 17.2°API Hamaca crude[(https://www2.argusmedia.com/en/news/1994737-venezuelan-crude-cargo-lands-in-curacao?backToResults=true) arrived last month aboard the Liberia-flagged Diamondway tanker, which has since departed and is now in Mexican waters, shipping data indicates. Two shipping sources told Argus that Isla Refinery is preparing to process the crude. PdV's Curacao office could not be reached for comment.

Following a tender process, Curacao's government is already engaged in exclusive negotiations with Germany's Klesch to take over the operation of the 335,000 b/d Isla refinery and Bullen Bay, as well as the CRU utility services unit, after PdV's long-term lease expires next month.

Klesch has declined to comment on the talks, but the firm has been carrying out due diligence and site visits, while Curacao's prime minister Eugene Rhuggenaath recently visited Klesch's German facilities, island officials say.

The Venezuelan oil ministry official said the proposed extension would buy PdV time to recover lost refining capacity within Venezuela, where almost all of the company's crude-processing facilities are off line because of a shortage of feedstock, maintenance and spare parts. Installed domestic refining capacity is 1.3mn b/d.

The Venezuelan government of President Nicolas Maduro, who is no longer recognized by many Western countries as the country's leader, blames US oil and financial sanctions for crippling its national oil industry.

A lease extension would also tide over PdV until the US presidential elections in November 2020, the Venezuelan official added. If US president Donald Trump loses his re-election bid, Caracas expects the sanctions would be eased or lifted altogether.

Curacao is part of PdV's once-bustling near-shore logistical network in the Dutch Caribbean. The island has received tens of thousands of Venezuelan migrants who have fled deteriorating economic conditions in Venezuela in recent years. Some 5mn migrants have left the country, with the largest share currently in Colombia.