Curacao names another preferred refinery bidder

Curacao has selected another preferred bidder to negotiate a lease on its oil refinery, Bullen Bay terminal and associated assets.

State-owned assets owner RdK said it will "immediately" start negotiating with a consortium, Curaçao Oil Refinery Complex BV (Corc). The Dutch-controlled island's government will carry out parallel negotiations on the contract conditions.

"The negotiations for all contracts are expected to start simultaneously and it is anticipated that a final agreement should be signed by the beginning of this March," RdK said.

The aging Isla refinery, which has a nominal capacity of 335,000 b/d, had been operated by Venezuela's state-owned PdV since the mid-1980s until Curacao allowed the lease to lapse at the end of 2019. In the waning years of the lease, the refinery operated at minimal levels because of a lack of Venezuelan crude feedstock and equipment maintenance. The plant has since been idle.

Corc, whose shareholders were not immediately disclosed, is the fourth candidate to recover the refinery. An ambitious $5.5bn agreement with Chinese state-owned Guangdong Zhenrong Energy (GZE) collapsed in early 2018 under a cloud of corruption allegations. Saudi Arabia's Motiva then flirted with the project, followed by German refiner and trader Klesch whose preliminary agreement was terminated in July 2020.

The refinery is critical to Curacao's economy, and a deal would have political implications ahead of the island's 19 March parliamentary elections. Covid-19 restrictions and the refinery's closure contributed to a record 20.2pc decline in real GDP in 2020, according to preliminary central bank estimates. The bank forecasts 4.8pc growth in 2021.

The Curacao development coincides with separate industry negotiations with two US companies in fellow Dutch Caribbean island Aruba, where PdV's US refining arm Citgo had been managing a $1.1bn project to refurbish another refinery. The deal fell apart after Venezuela's US-backed opposition took control of Citgo in 2019.

Curacao and Aruba were once key parts of PdV's nearshore logistical network that helped to ferry Venezuelan crude to longer-haul destinations.

By Patricia Garip