Venezuela's PDVSA to Settle Debt to Curacao Refinery, Seeks to Supply Oil
12.22.2023 By Tank Terminals - NEWS

December 22, 2023 [Reuters]- Venezuela’s state-run oil company PetrĂ³leos de Venezuela has signed an agreement to settle debts to Curacao’s refinery after ceasing operations in 2019, and could resume crude supply to the Caribbean facility, the parties said on Tuesday.


Following expiration of a contract that for years allowed PDVSA(PDVSA.UL) to operate the 335,000-barrel-per-day refinery and neighboring oil facilities, millions of dollars in debts were identified in Curacao and Bonaire, where the company had managed the BOPEC oil terminal.

“This is a fair deal for Curacao and also for PDVSA, which opens the road for a tighter cooperation in the future,” Patrick Newton, director of Refineria di Korsou (RdK), which owns the refinery, said in broadcast remarks.

Under the agreement, PDVSA will use oil cargoes to the island to pay a portion of the debt representing some $21 million in labor liabilities, Curacao Prime Minister Gilmar Pisas said.

The total amount of debt was not disclosed. PDVSA did not immediately respond to a request for details.

“We have reached a settlement after long negotiations, which the very (Venezuelan) President Nicolas Maduro has blessed for a total $450 million in 10 years,” Pisas added, referring to the debt settlement, a project to connect the two nations through a gas line and other bilateral projects.

PDVSA is working to resume regular crude supplies to Curacao’s refinery, once a hub for heavy oil storage, refining and shipping, said Venezuela’s oil minister Pedro Tellechea.

“We now have a happy ending that will allow us to reinforce Curacao’s operations. In Venezuela, we also are reaching agreements to supply the crude the refinery needs,” he added.

RdK had sold remaining crude stocks to cover part of the overdue debts and pending salaries. But another portion of the debt had remained unpaid.

The governments of Curacao and the Netherlands, which oversees the island’s foreign policy, for years have been in talks with Venezuela seeking payment. The temporary lifting of U.S. sanctions on Venezuela in October provided an opportunity for a settlement, after RdK in 2020 resorted to a New York court to enforce a $51 million payment from debt accumulated until that moment.

More recently, RdK also has tried to be part of a group of creditors seeking to participate in a U.S. court-organized auction of shares in one of Citgo Petroleum’s parent companies, owned by Venezuela.

The settlement agreement also is expected to allow PDVSA resume oil and fuel storage at the Bullenbaai terminal in Curacao and at Bonaire’s BOPEC terminal, the Curacao Chronicle newspaper reported earlier on Tuesday.

Curacao’s refinery remains idled since 2018. Several negotiations with firms in recent years have failed to secure a new operator.

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