Houston eyed to restart refinery
Nation of Aruba to seek investors; deal with Citgo ends
The Dutch Caribbean island of Aruba will be looking for new investors in Houston after negotiating an early end to a troubled contract with Citgo to restore and operate a long-idled refinery.
In a Wednesday news conference, Aruban Prime Minister Evelyn Wever-Croes said the island’s government got out of Citgo’s 25-year contract to repair and operate the 209,000-barrel-perday refinery. Choked by U.S. sanctions aimed at unseating Venezuelan strongman Nicolas Maduro, the Venezuelan-owned company was unable to fulfill its obligations, Wever-Croes said.
“It took a lot of time, a lot of effort and a lot of energy, but finally, Citgo admitted that it had no ability to comply with the agreements,” Wever-Croes said during a the news conference.
Citgo officials did not respond to a request for comment but told the Reuters news agency that the agreement with Aruba would allow the company to temporarily suspend the contract until “a democratic transition is ongoing in Venezuela.”
With the nearly 2-year-old sanctions still unable to force Maduro out of power, Aruba is not wasting time finding a new company to get the refinery operational again. That search, the prime minister said, will bring the island nation to Texas.
“The government will actively go looking for other investors,” Wever-Croes said. “Among other actions, the government will be
going on a road show in Houston and will be talking to serious investors to raise their interest in investing in Aruba.”
Designed to turn the heavy and high-sulfur crude oil from neighboring Venezuela into gasoline, diesel and other products, the Aruba Refinery was owned by San Antonio refining company Valero Energy but ceased operations in March 2012 amid multimilliondollar losses.
The government of Aruba ultimately took over the property and gave Citgo a 25-year contract in October 2016 to refurbish and operate the facility.
Citgo planned a $685 million overhaul and received $100 million of initial funding from its parent company Petroleos de Venezuela SA, or PDVSA. But the project stalled after the company could not acquire additional funding. Even if the project had been completed, U.S. sanctions would have prevented the facility from receiving and processing Venezuelan crude oil.
Aruba received bids from more than 25 companies when it announced the refinery rehabilitation project in 2016, Wever-Croes said. The government will now begin negotiations with other companies.
“We’re looking for a serious partner that can invest immediately, make the refinery state of the art, comply with environmental standards, pay their fair share to the government and treat their employees well,” Wever-Croes said.