July 17, 2019
Volume 3 Issue 4
Isla Refinery Inches Toward New Operator
Companies have submitted non-binding proposals to manage and operate the sparsely run Isla Refinery in Curacao beginning next year, the owner of the facility announced. A formal timeline for choosing a preferred operator is also set.
In a press release issued yesterday, the Refineria di Korsou – the Curacao government entity that owns the refinery – said its Project Management Organization, installed by RdK to lead the search for an operator, approached approximately 100 companies since February. The organization had issued 10 process letters with guidelines for non-binding proposal submittals.
Officials did not disclose the number of companies that submitted a non-binding proposal.
“We do inform the public that we are happy with the response received,” Marcelino de Lannoy, head of the refinery’s negotiation team, told Lube Report in an emailed statement.
The deadline for companies to submit a non-binding proposal was July 15.
RdK said representatives of two companies completed a site visit at the refinery in May and June to inspect installations and speak to refinery personnel, while 10 companies visited a virtual data room – a password-protected library in a cloud server, according to de Lannoy – to learn information about the refinery.
The refinery had previously stated that companies must enter into non-binding proposals in July, but did not reveal details beyond that timeline. Now, the Project Management Organization will evaluate received proposals and “move forward towards a letter of intent with potential parties” in August, according to the press release.
The refinery said the organization hopes to select a potential partner in October or earlier, with negotiations to take place during September, October and November, and come to an agreement with a preferred bidder in November or earlier.
Cash-starved Petroleos de Venezuela S.A., the current operator of the refinery, has been unable to procure crude oil to operate their units at the refinery since ConocoPhillips brought legal action on the state-run oil company.
The two organizations settled, but sanctions against PdVSA have still prevented the Isla Refinery from receiving any crude. PdVSA has operated Isla Refinery since Shell conveyed it to the Netherlands Antilles – now Curacao – in 1985, and its lease runs out at the end of this year.
The search for PdVSA’s replacement has been going on since 2013. An end to the search appeared to be within reach in December when the refinery chose a preferred company – identified by Curacao news organizations as Houston-based Motiva Enterprises – from a previous round of bidding. Later, the preferred bidder withdrew from negotiation after a corruption probe was launched into the selection process. According to the refinery, the bidder cited a delay in negotiation and the refinery’s review of other opportunities.
The probe concluded that no fees were transferred for preferential treatment, said de Lannoy, though three workers were dismissed from the company due to violation of its rules of conduct.
Curacao is an island located in the southern Caribbean and is a constituent country of the Netherlands.
The Isla Refinery, located in Curacao’s capital Willemstad, has crude oil production capacity of 335,000 barrels per day. The refinery includes a base oil plant that has capacity to produce 5,000 b/d of API Group I paraffinic base oils and 3,700 b/d of naphthenic stocks.