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Curacao's labor unions lobbies from PDVSA Isla refinery closure

bes-reporter

Klesch Group Potential New Operator of PDVSA (pdv) operated Isla Refinery in Curacao.

By Patricia Garip / Argus

BOGOTA
Petroleumworld 11 20 2019

Dutch-controlled Curacao is bracing for a shutdown of the Isla refinery at the end of December when Venezuelan state-owned PdV's operating lease expires.

The looming closure is sowing economic anxiety among Curacao government officials and refinery workers that PdV is leveraging to press its case for a lease extension on the refinery and strategic Bullen Bay terminal.

The refinery, which has a nameplate capacity of around 335,000 b/d but normally operates at around 220,000 b/d, is critical to the fragile local economy.

The refinery and deepwater terminal are part of PdV's once-bustling near-shore logistical network that is mostly dormant because of US financial and oil sanctions.

In recent weeks, the Venezuelan company restarted the refinery's thermal cracking unit to produce fuel oil for local consumption using 17.2°API Hamaca crude imported from Venezuela in October abroad the Liberian-flagged Suezmax Diamondway tanker. The partial refinery operations that began at the end of October were interrupted by an island-wide power outage in early November, but have since resumed, PdV's Isla unit said.

Curacao's government had been hoping for a smooth operational transition to Klesch Group, the German refiner and commodities trader that is negotiating a new lease with RdK, Curacao's refinery owner. But in an 11 November letter to the heads of the oil labor unions Apri and PWFC, RdK interim director Marcelino de Lannoy warned that a new operator would not be able to restart the refinery in January.

The letter obtained by Argus informs the workers that due diligence by Klesch is taking longer than expected, but RdK is making every effort to ensure an efficient transition.

Klesch has not responded to a request for comment. RdK confirmed that negotiations are still underway.

Union leaders visited Caracas early this month to meet with PdV chief executive and oil minister Manuel Quevedo to discuss the refinery operations, the latest outreach by Caracas to the island's labor groups.

Government officials worry that many refinery workers will abandon the island for jobs in Rotterdam, leaving the island bereft of the skills it will need for the plant to eventually restart.

Curacao's government has long sought to eject PdV for neglecting refinery maintenance and environmental clean-up. Island officials say the refinery has been mostly off line for years, and dismiss the recent partial restart as a campaign by PdV to curry favor with workers and heighten fears of a closure.

Even if the island's government sought to retain PdV on a temporary basis to keep the refinery running, it would need to request an extension of an existing US sanctions waiver. The Netherlands is part of the EU, which does not recognize Venezuelan president Nicolas Maduro.

PdV has operated the Shell-built refinery and Bullen Bay since the mid-1980s, utilizing the terminal in particular to transship cargoes for long-haul destinations. The company has already lost effective control over its US refining unit Citgo which is in the administrative hands of Venezuela's political opposition since early 2019



Story by Patricia Garip from Argus Media.

argusmedia.com / 11 19 2019

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