UPDATE 1-Aruba ends deal with Citgo to overhaul, operate island refinery

(Adds details, background)

Oct 9 (Reuters) – Aruba on Wednesday reached an agreement with U.S. based Citgo Petroleum Corp to end its contract to refurbish and operate the island’s refinery, a statement from the island’s prime minister said.

The Caribbean nation plans to pursue outside candidates to take over the 209,000 barrel per day refinery, said Prime Minister Evelyn Wever-Croes. The refinery has been idled due to U.S. sanctions on Citgo’s parent, Venezuelan state oil firm PDVSA.

“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 in a statement.

A Citgo spokeswoman did not immediately respond to requests for comment.

Citgo and Aruba in 2016 agreed to a 25-year contract to refurbish and reopen the facility, which had been idled since 2012 after its former operator, U.S.-based Valero Energy Corp , abandoned it due to weak profits.

The plant’s $685 million overhaul, which had received initial funding from Citgo and PDVSA, had made little progress since the United States two years ago issued a first round of sanctions on the Venezuelan state oil company. Earlier this year, another round of U.S. sanctions left the refinery without access to credit.

Reporting by Sailu Urribarri; writing by Gary McWilliams,
Editing by Bernadette Baum

This post was originally posted on Reuters: Company News – View Original Article

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Have lived and invested in Venezuela full time for the last eight years and visited for each of twelve years prior to that. Studied and closely followed developments in Venezuela since 1996.