Page 4 - LatAmOil Week 26 2022

LatAmOil COMMENTARY LatAmOil

Curaçao’s Isla refinery (Photo: PdVSA)

Two Caribbean refineries try

to move beyond their origins

As the Limetree Bay Refinery in St. Croix tries to sort out disputes over ownership amidst reports

of impropriety, RdK says CPR has a green light to discuss a final agreement for the Isla plant

ONE of the consequences of the US govern- known investors said this week that it remains
ment’s decision to impose trade sanctions on keen to assume ownership of the plant. While
WHAT: Venezuela, with a special emphasis on the oil one of the auction’s joint winners issued a state-
Efforts are being made industry, has been the deterioration of refineries ment last week saying that it had not purchased
to decide the fate of two in the Caribbean region that were built to pro- the facility, the other confirmed that it had.
refineries in USVI and cess Venezuelan crude. The 176,000 barrel per day (bpd) refinery,
Curaçao. Several of these refineries have been shut formerly known as Hovensa, was established in
down over the last decade, and several of them the 1960s and its capacity gradually expanded
WHY: have been put up for sale by their owners because to around 645,000 bpd. It was run by a joint ven-
Both plants were built the burden of their relationships with Venezuela ture (JV) between Hess Corp. and PdVSA, with
to process Venezuelan
crude, which is now diffi- had grown too heavy to bear. This burden has capacity falling to 500,000 bpd by 2010.
cult to obtain because of been partly financial in nature, as Caracas has The JV shut the facility down in 2012 and
sanctions. not been able to cover its share of costs for the then declared bankruptcy in 2015 before agree-
plants in which the Venezuelan national oil ing to sell it to Limetree Bay Ventures, a com-
WHAT NEXT: company (NOC) PdVSA held equity stakes. pany formed by EIG Global Energy Partners
WIPL and PHRT are not It has also been partly logistical, as PdVSA has and ArcLight Capital Partners of the US, the
done sparring over the simply not been able to provide the facilities following year. The company’s subsidiary Lime-
Limetree facility, and with enough crude oil to keep them running at tree Bay Refining intended to bring 200,000 bpd
RdK could encounter anywhere near full capacity. of processing capacity back online by December
challenges of its own. Shedding this burden has not always been 2019 but failed to meet that deadline. It then ran
easy, and some of the attempts to sell have gone into additional delays in 2020 as a result of the
awry. This still seems to be the case for the coronavirus (COVID-19) pandemic.
Limetree Bay Refinery in the US Virgin Islands After finally moving forward with the restart
(USVI), but the outlook may be improving for in early 2021, Limetree Bay Refining encoun-
the Isla refinery in Curaçao. tered more problems, including the release of
toxic liquids that rained down on nearby neigh-
Questions and accusations bourhoods. These incidents led the US Environ-
Amid confusion and accusations of impropriety mental Protection Agency (EPA) to order the
in a recent auction to acquire the Limetree Bay shutdown, and this in turn led to the bankruptcy
Refinery on the island of St. Croix, a group of court and the sale of the plant and its assets.

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