Page 7 - LatAmOil Week 09 2020

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Even though CAH is giving up the operatorship, PdVSA’s US-based subsidiary Citgo will remain bound by its contract with Aruba’s government for the delivery of jet fuel to Queen Beatrix Air- port and motor fuel to all filling stations on the island, it said.
RDA and CAH have been in negotiations about control over the San Nicolas refinery since April 2019. The parties began talks after determining that the PdVSA affiliate could not uphold its commitment to restarting the facil- ity, owing to the US government’s decision to impose additional sanctions on Caracas. In October 2019, they signed a memorandum of understanding (MoU) outlining their plans to suspend the earlier agreement.
Officials in Oranjestad have said they want to offer investors the chance to run the refinery, which has a throughput capacity of 235,000 bar- rels per day (bpd). The plant has been idle since 2012, when its former operator, Valero Energy (US), determined that it was no longer econom- ically viable.
After Valero’s departure, Aruba’s government struck a deal with PdVSA. In 2016, the parties signed a contract that provided for CAH to renovate the oil refinery, along with its storage, docking and terminal facilities, and assume
responsibility for management over a period of 25 years.
Last October, the government of Prime Min- ister Evelyn Wever-Croes reported that more than two dozen companies had expressed inter- est in the refinery. It did not name any potential investors but said it was ready to start discus- sions with 25 firms about taking control of the plant.
The Croes administration also indicated that it wanted to publicise the upcoming sale. It said it hoped to stage a formal roadshow presentation in Houston and establish a negotiating commit- tee to facilitate talks with possible partners.
Oranjestad has also indicated that it will seek to maintain staff levels at the refinery, as requested by a local union. The first point of dis- cussion with potential buyers will be the reten- tion of as many of the plant’s current employees as possible, it said.
Until the conclusion of the transfer agree- ment last month, Citgo remained responsible for covering refinery workers’ wages, along with payments to contractors and vendors, as per the contract it signed in 2016. It has not been able to cover those obligations, owing to the finan- cial difficulties arising from the US sanctions regime. ™
COLOMBIA
Ecopetrol chief says virus outbreak has not reduced oil deliveries to China
FELIPE Bayon, the CEO of Colombia’s national oil company (NOC) Ecopetrol, said earlier this week that the coronavirus outbreak had not affected crude shipments to China and other Asian markets.
Colombia’s heavy crude oil is popular enough among Chinese refiners that delivery volumes have not dropped, despite widespread reports that China’s demand for energy has sagged as a result of tight travel restrictions and reduced manufacturing activity in the country, Bayon told Reuters in an interview. “The Chinese refineries see us as part of the base load, which is good,” he explained. “So we haven’t seen an impact in terms of volumes.”
He also told the news agency that Ecopetrol was sending oil to China under multiple types of contracts, not just under long-term agreements. “We have a combination of terms,” he remarked. “We have long-term contracts with some of the refineries, and we have spot shipments as well.”
Bayon’s optimism is a positive sign, given that China and other Asian buyers absorb a large portion of Colombia’s total oil exports. Ecopet- rol sent no less than 46% of its exports to Asia in 2019, and most of those barrels went to China,
the CEO told Reuters. In the fourth quarter of 2019 alone, he added, deliveries to Asia made up 54% of the NOC’s exports.
He did stress, though, that the company was closely monitoring events in China and other affected countries in order to gauge the impact
of the virus on oil demand. He also reported that Ecopetrol had introduced travel restrictions in a
bid to limit its employees’ business trips to any
and all countries in Asia and Europe. 
Colombia’s heavy crude is popular among Chinese refiners (Photo: Colprensa)
Week 09 05•March•2020 w w w . N E W S B A S E . c o m P7