Page 7 - LatAmOil Week 43 2019

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Aruba gearing up to offer San Nicolas oil refinery to outside investors
THE government of Aruba is moving forward with plans to offer investors the chance to buy the island state’s only oil refinery, which is located in the coastal town of San Nicolas. Last week, Oranjestad said it was ready to begin talks with potential investors and set up a roadshow to advertise the asset.
The plant, which has a throughput capac- ity of 235,000 barrels per day (bpd), has been idle for about seven years. Its former operator, Valero Energy (US), departed Aruba in 2012 after determining that the refinery was not eco- nomically viable.
Subsequently Aruba’s government struck a deal with Citgo Petroleum, a US-based sub- sidiary of Venezuela’s national oil company (NOC) PdVSA, to re-open the facility. The par- ties signed a contract in 2016 that provided for a Citgo subsidiary to renovate the oil refinery and assume responsibility for its management over a period of 25 years.
To date, Citgo has been unable to execute the contract, largely owing to the sanctions that the US government began imposing on its parent company PdVSA in 2016. It decided to quit the project earlier this year, after Washington intro- duced even tighter trade restrictions that cut off the refinery’s access to credit, and began negoti- ations with Aruba’s government on its options for an exit.
Those discussions bore fruit earlier this month, when Aruba’s government and the PdVSA subsidiary signed a memorandum of understanding (MoU) on the termination of the 2016 contract. The document cleared the way for Oranjestad to prepare for a sale, and the government of Prime Minister Evelyn Wever-Croes said last week that more than
GUYANA
ExxonMobil, Hess, CNOOC plan early start for Liza-1
two dozen companies had already expressed interest. It did not name any potential investors but said it was ready to start talks with 25 firms about taking control of the refinery, as well as its storage, docking and terminal facilities.
The Croes administration also indicated that it wanted to publicise the upcoming sale. To this end, it said it hoped to stage a formal roadshow presentation in Houston and establish a negoti- ation committee to facilitate further interaction with potential buyers.
It also stated that it would be focusing on efforts to maintain staff levels at the refinery, as requested by a local union. In talks with possible investors, it said, the first point of discussion will be the retention of as many of the plant’s current employees as possible.
Citgo currently remains responsible for cov- ering refinery workers’ wages, as well as pay- ments to contractors and vendors, in line with the contract it signed in 2016. But it has not been able to cover those obligations because of the financial difficulties arising from the US sanc- tions regime. ™
Refinery in San Nicolas, Aruba (Photo: Koninkrijksrelaties.nu )
LIZA-1, the first stage of the Stabroek block off- shore Guyana, is reportedly set to begin produc- tion ahead of schedule in December.
ExxonMobil and its non-operating partners in the project had said before that first oil would occur in the first quarter of 2020. But on October
30, a representative of the US-based firm Hess revealed that the target date had been changed.
Speaking during a conference call on the company’s third-quarter earnings, CEO John Hess said that Liza-1 yields were set to ramp up slowly in early 2020.
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