Venezuela’s state-owned PDVSA plans to reactivate the Isla Refinery on Curacao in July with imported crude from third parties, according to sources in the company, labor union and with Curacao’s government. The labor leaders of the refinery met in Caracas this week with Manuel Quevedo, [who is] president of PDVSA and oil minister,” said a company official who was present at the meeting and who asked not to be identified. “PDVSA will have to make the decision to send some 3 million barrels of crude to generate cash flow to cover expenses from September to December 2019 or send $60 million to honor the contract and avoid claims,’ the official said. “If not, Isla will have to declare force majeure and bankruptcy. The refinery is now totally paralyzed. PDVSA promised the reactivation and offered to supply crude in July but through an intermediary.”
There were no details immediately available about the intermediary nor the quantity of crude promised by PDVSA to Curacao to reactivate the refinery. Meanwhile, a labor leader at the Refineria di Korsou (RdK), the owner of the refinery and storage facilities in Curacao, told S&P Global Platts that “RdK will take charge of the operations in July, under the direction of PDVSA.”
The Isla refinery has been operated by PDVSA since 1985 under a rental agreement with the Dutch Caribbean autonomous government of Curacao. The agreement has been renewed periodically and the current contract expires in 2019. The industrial services plant called Curacao Refinery Utilities (CRU) is property of the Curacao government.
The Curacao refinery has a capacity to process 335,000 b/d but in practice this volume is not possible because of infrastructure limits. The maximum throughput is estimated at between 270,000 and 290,000 b/d, depending on the type of crude. In 2017 and 2018 , the refinery was impacted by failures in its industrial services functions, by a fire that occurred in the CD-3 distillation unit and by the lack of crude availability.
In the last 12 months, the processing level has been nearly zero owing to the lack of the supply of vapor and embargos against PDVSA crude shipments . Also impacting operations has been the scarcity of light and medium crudes and heavy crudes, including Tia Juana and Merey 16.