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Curaçao comes with new candidate to operate old refinery

After years of searching, there may still be a candidate to breathe new life into the Curaçao refinery. An American/Brazilian consortium with mainly Venezuelan administrators will negotiate with Curaçao over the next two months about the operation of the refinery and the management of the oil transhipment terminal on the island.

That should lead to a new lease term of thirty years and an initial investment of $650 million to start up the refinery. About 2000 people are needed in this phase as labor force. Once the refinery is operational, 800 people should be able to find work there.

Political squabbles

The search for a new operator started in 2013, when it became clear that the Venezuelan state oil company PdVSA could not have the lease contract of the old Shell refinery extended in 2019.

Since then, a handful of international and local companies have tried to step in, but that has repeatedly failed due to political squabbles in Willemstad and the involvement of the Netherlands. For geopolitical reasons, The Hague did not see the arrival of the first serious takeover candidate, the Chinese state-owned company Guangdong Zhenrong.

The current consortium was registered in the Curaçao trade register two weeks ago under the name Caribbean Petroleum Refinery† All but one of the directors of the holding and operating company are from Venezuela. Almost all of them have a bad relationship with the regime in their motherland. Many therefore live in the United States.

The question is where this consortium will get its oil. The American sanctions against Venezuela may be slightly lighter, but whether there will be room for the new consortium to obtain Venezuelan oil is by no means certain, according to sources in Willemstad.

On the other hand, the old refinery with Venezuelan or other oil can play a significant role again, now that the increased oil price can make oil refining in Curaçao profitable again.

More active environmental movement

For over a hundred years, the oil industry has made Curaçao a prosperous country. But under Venezuelan management, hardly any investment was made in the refinery. Curaçao also had to deal with an increasingly active environmental movement.

Isla, as the refinery is popularly called, was able to continue refining for a long time under highly polluting conditions. The company owed this to an environmental permit that it was allowed to draw up itself in the 1990s. The government did not want to enforce even those very broad standards and the judiciary could hardly act with existing legislation.

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