July 06, 2020 [Argus] – Aruba is considering bids from three parties for an oil storage lease as it moves forward with a process to lease a mothballed refinery and associated land.

A storage lease is expected to be awarded by 1 August, the prime minister’s office told Argus.

The Dutch Caribbean island has 10 storage tanks available for prompt leasing with capacity for 665,000 bl of clean products, 5.224mn bl of crude and 518,000 bl of naphtha. Another seven tanks awaiting repairs have capacity for 4.224mn bl of crude. State-owned Refineria di Aruba (RdA) is running the tender to lease the assets.

The storage and related downstream assets became available after the withdrawal of PdV Holding, a US subsidiary of state-owned PdV, earlier this year. Delaware-based PdV Holding is a parent firm of Houston-based Citgo Petroleum, which had managed the planned refurbishment of Aruba’s refinery. PdV Holding and its subsidiaries, Citgo Holding and Citgo Petroleum, are controlled by Venezuela’s US-supported political opposition, which inherited the unfinished $1.1bn project when it took nominal control of the US assets last year. PdV in Caracas remains in the hands of the Venezuelan government of President Nicolas Maduro, who is the target of extensive US sanctions.

Refinery offer

On 8 June, Aruba opened a process to find a new operator for the 235,000 b/d San Nicolas refinery that was previously owned and operated by US refiner Valero before Citgo took over in 2016.

RdA issued two requests for expressions of interest: one for a lease to restart and/or refurbish the refinery and develop other industries such as LNG transshipment, petrochemical plants and renewable energy on the site; and another to replace the refinery altogether with other industries.

Interested parties have until 17 July to participate in the process. The results of the solicitation for expressions of interest will be issued by 14 August.

Among the lease conditions cited by Aruba is compliance with the foreign affairs policy of the Kingdom of the Netherlands and policies by the US Office of Foreign Assets Control, which administers US sanctions. The EU and the US do not recognize Maduro’s government, and the condition effectively precludes PdV from regaining access to Aruba’s assets, and from any company doing business with Venezuela to engage the assets. The process is taking place in parallel to fellow Dutch-controlled Curacao’s separate planned offer for storage which also became available after PdV’s withdrawal.

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