WILLEMSTAD - The Venezuelan State Oil Company PdVSA will continue operating the Curaçao refinery for a maximum of one year on the basis of a new contract. This is a transition period from 1 January "to give the potential new operator a chance to take over the refinery."
This is according to Marcelino de Lannoy, interim director of government-owned company Refineria di Kòrsou (RdK), owner of the refinery and the installations. The extension of the license that the Office of Foreign Assets Control (Ofac) in the United States (US) has issued to Curaçao has paved the way to do business to settle the work of PdVSA when a new operator takes over the operations.
De Lannoy says that RdK can now also commercialize crude oil and products. Payment with oil is an option. Meanwhile, negotiations with the exclusive American candidate Klesch Group continue unabated. De Lannoy cannot state the date of a possible agreement.
RdK and the Venezuelan state oil company PdVSA, parent company of Refineria Isla, are joining forces to prevent the Isla staff from being on the street from January 1, 2020. Both parties "are willing and will work together to realize a transition period," says RdK in a press release. That is the result of a meeting in Caracas last Saturday of a RdK delegation led by interim director Marcelino "Chonky" de Lannoy with PdVSA CEO Manuel Quevedo.
The parties have agreed that there will be a transition period in which the jobs of employees currently employed by Refineria Isla are guaranteed from January 2020.
In addition, there has been talk of starting up maintenance work so that contractors can again get back to work. This will also alleviate the situation of these contractors who are now without a job.
RdK’s press release does not discuss the status of the negotiations with the Klesch Group. According to the schedule, an agreement should have been ready on November 30 to meet the January 1 deadline. The current lease contract with PdVSA expires on December 31. Last week Prime Minister Eugene Rhuggenaath also said that there was still intensive negotiation and a week earlier he spoke of "a final phase". Rhuggenaath called it "crucial weeks" and said that everything is aimed at signing an agreement with the exclusive candidate as soon as possible.
PdVSA and RdK will work together to ensure that crude oil becomes available to the refinery in the short term so that production can be started. All this is bound by the restrictions included in the extension of the safeguard against US sanctions against Venezuela.
The new license that was issued on November 22 and expires on December 31, 2020, explicitly states that the production of the refinery can be sold, but only for the purpose of paying people or agencies in Curaçao. The Venezuelan companies cannot profit from the sales. All payments must go to local authorities where Refineria Isla is still indebted. In addition, RdK must report to Ofac no later than January 15 and then monthly.
The license requires termination of business contacts with PdVSA and Refineria Isla as a requirement. The first report in January should describe the activities and transactions relating to the settlement of business relations with PdVSA and Isla prior to the expiry of the lease of the oil refinery and terminal at Bullen Bay on 31 December 2019.
Moreover, by January 15, RdK must report on what has happened to "end" the duties of PdVSA and Isla as operators.