Page 5 - LatAmOil Week 26 2022

LatAmOil COMMENTARY LatAmOil

St. Croix Energy (SCE) – “formed by a group of for the shared services provided by LBT, which is
St. Croix residents to explore the possibility of a currently over $5.6mn, which includes $1.15mn
safe and environmentally compliant restart” of for fuel prepayments.”
the refinery – won the first bankruptcy auction
with a bid of $20mn plus associated fees. How- Curaçao names preferred bidder
ever, the auction was reopened by Judge David Meanwhile in Curaçao, local authorities have
Jones of the US District Bankruptcy Court for authorised a consortium known as Caribbean
the Southern District of Texas, to allow a $30mn Petroleum Refinery (CPR) to move forward on
cash bid from a Jamaican firm, West Indies negotiations with Refineria di Korsou (RdK),
Petroleum Ltd (WIPL). By the time the auction the state-run operator of the island’s only
closed in December, the bid had risen to $62mn. oil-processing plant.
In a statement dated June 20, RdK explained
PHRT vs. WIPL? that it had selected CPR as its preferred bidder
According to court documents and a company for the contract to secure a partner to operate
press release published in January, WIPL and and manage the facilities of the Isla refinery,
its partner Port Hamilton Refining and Trans- including the Bullen Bay terminal and other
portation (PHRT) were declared the winning associated facilities and infrastructure. The gov-
bidders. Last week, though, WIPL issued a ernment of Curaçao and RdK aim to install a
statement to the contrary, saying it wished “to negotiating committee in the near future so as
clarify that contrary to media reports it is not a to wrap up talks and finalise a deal by September
stakeholder in the Limetree Bay Refinery in St. 1, it reported.
Croix in the US Virgin Islands and was not the The state-run company did not reveal many
entity which purchased the refinery.” details of CPR’s offer. It did say, though, that it
It continued: “Although an initial partici- expected the consortium, which consists of six
pant in the early bidding process, due to legal US firms and one Brazilian firm, to begin carry-
factors WIPL elected not to further pursue the ing out the deal in early September, immediately
initiative. Those factors also constrained WIPL after the signing of a contract.
from commenting sooner about the inaccurate It also said that CPR wanted to take out a
reports in the media ... The sale of the Limetree 30-year lease for the refinery, with the option of
Bay Refinery was successfully closed earlier this renewing for another 10 years. The group also
year by Port Hamilton Refining and Transpor- wants to invest about $650mn in the plant over
tation, which is a consortium of US- and Carib- the first three years of its contract and has said
bean-based investors.” that these outlays will be necessary to cover the
Subsequently, SCE’s legal representative cost of repairs, maintenance and restarts for pro- PdVSA has not
Gregg Galardi released a statement on the duction, processing and other units, as well as
group’s behalf. “SCE believes that the statement conversion of the power systems to natural gas been able to
issued by WIPL demonstrates what we initially in order to reduce carbon emissions. provide either
alleged: that the auction was reopened for WIPL
not because of the alleged emergency circum- Cautious optimism facility with
stances regarding WIPL’s principle [sic], but This sounds like good news, but it’s worth
ultimately because the successful bidder was remembering that RdK’s path to this point has enough oil to
not WIPL.” not always been smooth.
He added: “Therefore, the auction was To date, CPR actually is the fifth entity that keep running at
improperly reopened for a bidder that should has sought to acquire the oil-processing plant, full capacity in
not have been permitted to bid at the reopened which has a design capacity of 335,000 bpd. RdK
auction.” has also held negotiations with China’s Guang- recent years
The statement concluded: “We are disheart- dong Zhenrong Energy (GZE), Saudi Arabia’s
ened to learn of the financial and physical condi- Motiva and the Klesch Group, a privately held
tion that the refinery is currently in. We still have international industrial commodities firm,
a genuine belief that an environmentally compli- before starting discussions with Curaçao Oil
ant restart is in the best interest of the people of Refinery Complex (CORC) in 2020. It then
the Virgin Islands and stand at the ready for any brought those discussions with CORC – which
way we can help accomplish that.” is led by Dick and Doof, a Dutch contractor that
Meanwhile, PHRT issued its own statement previously provided services to Caribbean and
on Limetree Bay’s ownership, confirming that Latin American downstream facilities owned by
WIPL was not involved in the matter. “The Shell (UK) – to an end last year.
Limetree Bay Refinery was earlier this year suc- In practical terms, this means that RdK has
cessfully purchased by PHRT, as reflected in the no guarantees. It cannot be absolutely certain of
bankruptcy court filings ... WIPL did not take signing a contract with CPR, and it cannot be
title to the refinery. The refinery remains owned 100% certain that the negotiations will not fall
by Port Hamilton,” it said. “Port Hamilton was apart before the contract is finalised and made
the legal entity use to acquire the Limetree Bay ready to sign. In other words, it may very well
Refinery in St. Croix, and it also is a separate have to go through the process of finding a stra-
legal entity from WIPL.” tegic partner yet again.
Despite taking ownership of the unit in Jan- Either ways, its difficulties so far highlight
uary, Limetree Bay Terminals (LBT) accused the challenges facing Caribbean refineries built
PHRT of failing to pay “its outstanding balance to process Venezuelan crude. ™

Week 26 30•June•2022 www. NEWSBASE .com P5