WILLEMSTAD - The general impression of the interested parties of the petroleum installations of the Isla, the ability to do business and the quality of the available workforce is positive. Nevertheless, the number of interested parties to take over the exploitation is low.
The Refineria Isla employees heard this recently during two information sessions organized by government-owned company Refineria di Kòrsou (RdK) and the Project Management Organization (PMO), which was specifically set up in connection with the search for a new operator in less than six months.
From the responses to date it can be concluded that the first three years of IMO 2020 (International Maritime Organization) are the main reasons for taking over the exploitation. This concerns the permitted fuel for emission reduction on sea-going vessels. Isla is able to produce fuel oil that meets the new standard.
For the rest, there is no interest in immediately investing billions in order to upgrade the installations. Thus the RdK / PMO presentation. The investments needed to keep the Isla operational in the long term require feasibility studies by the operator.
There is, however, more interest in operating the terminal at Bullenbaai.
"However, around 50 people work there", with which RdK wants to indicate that in terms of employment it is only a fraction of the approximately 1,000 employees in the refinery area. Parties are told that Isla, Bullenbaai and CRU are a total package that is offered.
So far there have been two visits from candidate operators. With the code name "Klara" and the code name "Fiona". More visits are expected in the coming weeks. Ten so-called "process letters" have been issued to guide the issue of a "non-binding proposal".
It is expected that around five "non-binding offers" will have to be received no later than 15 July - in just over a week. The selection and signing of the Letters of Intent (LOI) will then take place at the end of July or beginning of August, after which the binding proposals must be received by the end of September.
The preferred candidate will be chosen at the end of September and otherwise at the beginning of October, followed by negotiations in October and November, so that a contract can be signed in November or possibly earlier.
RdK / PMO focus on three possible models of a partnership: a lease contract (similar to PdVSA); a joint venture between RdK and a party; or sale of the oil installations while the property remains in the possession of the Country of Curaçao.
If RdK wants to take over the exploitation itself - "tolling" - a large amount of starting capital is required: at least $ 500 million to guarantee the supply of crude oil. Working capital and personnel are also required. Although the latter is available, the amounts are too large for the government company RdK and the Curaçao government, which itself is already struggling with financial deficits.