Curacao, Aruba Grapple with Distressed Oil Assets
11.30.2020 By Greta Talmaci - NEWS

November 30, 2020 [Argus Media] – Curacao severed an oil storage contract with SPS Drilling E&P six weeks after it was signed, underscoring the challenge of monetizing Caribbean assets formerly run by Venezuela’s state-owned PdV.

The 15 September contract with state-owned Curacao Refinery Utilities (CRU) covered 5.8mn bl of storage at the Bullen Bay terminal. In an interview two days later, SPS Drilling E&P chief executive Manuel Chinchilla had told Argus that fuel oil and clean oil products would start arriving in mid-October. The shipments never materialized.

In an internal employee memo shared with Argus, CRU blamed SPS Drilling E&P for failing to comply with the contract in the context of altered market conditions.

“The market for storage and tank facilities was negatively impacted after the signing of the contract with SPS. Notwithstanding various efforts by RdK to hold SPS on their contract, they defaulted on the contract. This development forced RdK to terminate the agreement with SPS,” the memo said.

SPS Drilling E&P did not immediately comment. But a source close to the company said the deal was prematurely terminated by CRU after it declined to upgrade the terminal to facilitate imports from at least two prospective SPS clients.

Bullen Bay and Curacao’s idle 335,000 b/d Isla refinery were operated by PdV under a long-term lease that ended in December 2019. Starting around mid-2019, Curacao has been casting about for new refinery operators as it grapples with residual labor debt and cautiously navigates restrictions associated with US oil and financial sanctions on Venezuela. A preliminary agreement with Germany’s Klesch collapsed earlier this year. In a new tender, Curacao hopes to select a preferred bidder with which to begin negotiations at the end of November or early December.

Deserted islands

Aruba, like Curacao, is seeking to monetize its storage tanks and revitalize or repurpose its 235,000 b/d San Nicolas refinery formerly owned by Valero. The dismantled refinery was supposed to have been refurbished by PdV’s US refining arm Citgo under an ill-fated 2016 contract.

A short-lived agreement with distressed-asset specialist Emqore was terminated last month, a senior Aruban government official told Argus.

Curacao and Aruba had been part of PdV’s once-bustling Dutch Caribbean logistical network that also included Bonaire and St Eustatius. The Venezuelan company began retreating from the nearshore assets as it lost production capacity at home and came under US sanctions starting in 2017.

With tourism hit by the Covid-19 pandemic, the islands are now under significant financial duress partially mitigated by Dutch support.

Click Here to Access Today a 6,000 Tank Terminal Database With a Pro Trial
6,000 terminals as per the date of this article. Click on the button and register to get instant access to actionable tank storage industry data

Vopak Ups Outlook as Demand for Energy Storage Boosts Profit
05.20.2024 - NEWS
May 20, 2024 [Reuters]- Tank storage company Vopak VOPA.AS on Wednesday raised its full-year prof... Read More
China Energy to Complete New Serbian Refinery in Four Years - Report
05.20.2024 - NEWS
May 20, 2024 [SeeNews]- China Energy International Group is expected to build a 2.4 billion euro ... Read More
UAE's ADNOC Buys Stake in NextDecade's Rio Grande LNG Facility, Signs Supply Deal
05.20.2024 - NEWS
May 20, 2024 [Reuters]- Abu Dhabi National Oil Company (ADNOC) has acquired an 11.7% stake in Nex... Read More
OMV Petrom Commissioned the Largest Crude Oil Storage Tank in Romania, at Petrobrazi Refinery
05.20.2024 - NEWS
May 20, 2024 [The Diplomat]- OMV Petrom, the largest integrated energy producer in Southeastern E... Read More