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February 13, 2019

Volume 3 Issue 3

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Preferred Bidder Ditches Curacao Talks

Curacao’s Isla Refinery is taking a step back in its search for a new manager after its preferred bidder withdrew from negotiations, refinery officials said in a statement last Tuesday.

Refinery officials have refused to publicly identify the preferred bidder, but Antilliaans Dagblad, a Curacao news outlet, reported that it was U.S. refiner Motiva Enterprises in a Dec. 14 article that cited several unnamed sources. Motiva, which is wholly owned by Saudi Aramco, had refused to confirm or deny its participation in negotiations, and a spokeswoman declined last week to confirm if the company withdrew from negotiations.

Photo: Anna Krasnopeeva/Dreamstime

The Isla Refinery in Willemstad, Curacao. The refinery took a step back in its search for a new operator after its preferred bidder withdrew from negotiations last week.

The withdrawal ramps up pressure on the Curacao-owned refinery owner, since the contract with its existing manager expires at the end of this year. Officials have said they want to sign a replacement months before then in order to allow for a transitioned hand-over.

Arthur Gevers, a process specialist at the refinery, said it is still devising a strategy for the selection process and is consulting London-based IHS Markit about how to proceed.

“We have a pre-selection of four companies,” Gevers told Lube Report. “We selected the preferred bidder, and that one has stepped out, so we’ll just proceed with the other participants of the process.”

The government has worked since 2013 to find a manager that would replace current operators Petroleos de Venezuela S.A. and upgrade the aging refinery, which includes an 8,700 barrel per day paraffinic and naphthenic base oil plant. In 2017 it tried to negotiate a contract with China-based Guangdong Zhenrong Energy Co., but those talks fizzled. Last year the government entertained bids from numerous companies before entering negotiations with the preferred bidder late in 2018. It had hoped to sign a memorandum of understanding as early as this month.

Negotiations were halted, however, due to the launched of a probe into allegations that the selection process was corrupted. In its Feb. 5 statement, the refinery said the preferred bidder withdrew because of that delay and because the refinery reviewed other opportunities.

Gevers confirmed the government’s former lead negotiator, Clift Christiaan, was relieved of that responsibility at the demand of refinery workers and Curacao trade unions.

PdVSA has operated Isla Refinery since Shell conveyed it to the Netherland Antilles – now Curacao – in 1985. Curacao is an island located in the southern Caribbean and is a constituent country of the Netherlands.