Curacao Scraps Deal With China’s Guangdong Zhenrong Energy to Run La Isla Refinery
The two sides signed a deal in 2016 to invest some $10 billion in upgrading the facility.
Curacao’s government said Guangdong Zhenrong does not have the muscle to invest in the refinery and lacks “unconditional support” from the Chinese government.
“GZE turned out to be the contrary of what it said at the time of signing the MoU (memorandum of understanding),” Curacao said on its government website in a statement dated Sunday.
“Curacao is looking for a viable alternative to guarantee the future of the refinery,” it added.
For its part, Guangdong Zhenrong had this response.
“GZE does not understand and is very disappointed for the referenced letter from the Curaçao government and others,” it said in a letter. “GZE and its partners have made and are making promising progress towards the project financing. We have also established the financial basis about supplementing crude for lifting the current refinery throughput to a normal level. Unfortunately, Curaçao government has not been willing to listen to and further verify these progress. These measures are urgently needed by Curaçao as per our understanding. Government support is one of the most important factors to boost the confidence of the investment. Without this support, GZE and its partners will have to reconsider the investment direction.”
Venezuelan state oil company Petróleos de Venezuela S.A. (PDVSA) has for decades operated the refinery, which opened in 1918, under a lease agreement.
But cash-poor PDVSA has been reluctant to invest some $1.5 billion that Curacao authorities requested several years ago to modernize the 335,000 barrel-per-day facility.