Curacao proposes transition terms for PdV

Dutch-controlled Curacao is awaiting Venezuelan state-owned PdV's response to a draft proposal to continue operating the Isla refinery and Bullen Bay terminal until a new operator is lined up.

PdV's long-term lease expires at the end of December, but Curacao's exclusive negotiations with German refiner and trading company Klesch for a new lease on the assets have not yet wrapped up.

RdK, Curacao's state-owned refinery company, said today that "concrete steps" are being taken to "shape the transition period while the negotiations continue to materialize a durable future for the refinery."

The terms of the transition, including the duration that was originally described by Curacao as lasting for up to one year, have yet to be determined. But RdK is seeking to introduce stricter conditions on PdV, which island officials blame for neglecting maintenance and environmental responsibilities.

A thermal cracking unit at the 335,000 b/d Isla refinery is currently processing Venezuelan heavy crude, although the complex has been off line for most of the past two years because of a lack of feedstock and utility services.

"The transition period will cover the time lapse ... after December 31, 2019 till the moment the future partner takes over the operations of the refinery," RdK said.

"The agreement for a period of transition should by no means be interpreted as an extension of the present management and operation contract of the refinery."

The talks with PdV come at a sensitive time of growing US pressure on Venezuela in the form of financial and oil sanctions meant to unseat President Nicolas Maduro.

"Both RdK and PDVSA agree that the terms agreed are to be in accordance with the special license issued by Office for Foreign Asset Control (OFAC)," RdK said, referring to the US Treasury license that allows Curacao to temporarily engage with the Venezuelan company without risk of running afoul of the sanctions.

PdV has not commented on the Curacao talks but an Isla official confirmed that a draft agreement was sent to PdV on 6 December. The Venezuelan company had been lobbying for months to remain in Curacao, which is a critical part of its once bustling logistical network in the Dutch Caribbean.

Klesch has not commented on the talks with Curacao to take over the assets, which the island government had been hoping would be in fresh hands before the end of PdV's lease.

The US sanctions are aimed at forcing out Maduro in favor of opposition leader Juan Guaido, who is recognized as Venezuela's legitimate interim president by the US and most Western countries, including the Netherlands, which controls the foreign policy of Curacao.

By Patricia Garip

source: Argus Media