July 5, 2022

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Curaçao comes with a new filter to run an old refinery

Curaçao comes with a new filter to run an old refinery

After years of research, there may still be a candidate to breathe new life into Curaçao’s refinery. A US/Brazilian consortium with primarily Venezuelan administrators will negotiate with Curaçao over the next two months about operating the refinery and managing the island’s oil trans-shipment terminal.

This should result in a new thirty-year lease and an initial investment of $650 million to start operating the refinery. About 2,000 people are needed at this point as workforce. Once the refinery is operational, 800 people should be able to find work there.

political differences

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

Since then, a few international and local companies have attempted to intervene, but this has repeatedly failed due to political disagreements in Willemstad and the intervention of the Netherlands. For geopolitical reasons, The Hague has not seen 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 directors of the holding company and operating company except for one from Venezuela. Almost all of them have a bad relationship with the system in their home country. So many live in the United States.

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

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On the other hand, the old refinery with Venezuelan oil or other oil can play an important role again, now that high oil prices can make oil refining in Curaçao profitable again.

More active environmental movement

For more than a hundred years, the oil industry has made Curaçao a prosperous country. But under the Venezuelan administration, investment in the refinery was hardly made. Curaçao also had to contend with an increasingly active environmental movement.

Isla, as it is popularly called, was able to continue refining for a long time under highly polluted conditions. The company owes this to the environmental statement that allowed it to mold itself in the 1990s. The government did not want to apply even those very broad standards, and the judiciary could not act in accordance with the existing legislation.