Published On: Thu, Sep 5th, 2013

To Isla or not to Isla, that is the question

Jacob Gelt DekkerThe Parliament of Curacao decided, that modernizing the aging oil refinery has its preference over all other alternatives and it will seek investors and partners to realize that objective.

The giant plant was built over a long period of time by Shell, starting in 1908 ,and reached its greatest activity peek during World War II. Shell abandoned operations in 1986, when it lost its up stream profits from nationalized oil wells in Venezuela.

The Island of Curacao became the new owner and leased the plant to Petróleos de Venezuela S.A., Pdvsa , the Venezuelan State owned oil company. Pdvsa's lease contract was under the most attractive terms imaginable, in exchange for a guarantee to keep up local , related economic activities and regular reinvestments in, and maintenance of the plant.

Many claim that Pdvsa's efforts fell far short of its contractual obligations and, as a consequence, the factory's present pollution of air, sea and soil far exceeds all local and international legal norms, causing great damage to the newly emerging tourist industry and the environment. Supposedly, reinvestment and modernization would remedy most of these ills. It would require a minimum of US $ 600 million to about US $ 1,6 billion, with a return on investment of 1-3 years.

Others see great benefit in total closure of the plant, and massive reinvestment in green technologies in a new town, popularly referred to as,Green Town . The Green Town faithful appear unshakable in their belief that a new future of renewable energy from sun and solar, is just around the corner. "In the immediate future, even excavating presently known oil reserves, will cease and be abandoned," accruing to its founder and charismatic leader, Andres F.Casimiri.

Lack of capital, a sufficiently trained workforce for the Green Industry and lack of entrepreneurship are but a few of the many handicaps on the development track of Green Town. Since all of Green Town's initiatives sprout from a reaction to the ills of the present refinery, it is hard to judge any of its initiatives and remedies at arm's length. Any suggestion to build Green Town on a different location, other than the present refinery, is not discussable, but appears to deflate the initiative.

Investors in renovation of the existing Curacao plant are limited. Next to Pdvsa itself, are a few natural partners, especially all those who are now active with Pdvsa in the Orinoco river basin, predominately, Chinese and Russians companies. Getting these parties for negotiations around the table is not an easy job. The responsibility for the refinery resorts under Curacao's Prime Ministers. Rapidly succeeding governments of Curacao with four Prime Ministers since 10-10-10, does not help. Appointment of a small dedicated task force of ,one or two persons, with a network in place around the world, to produce the desired results, is advisable. This task force should be beyond,above and independent of all local politics.

Technical analysis and extensive reports demonstrated, that it is relatively easy to make the refinery free of exhaust and pollution. Several applied alternatives could produce attractive products from an even more profitable plant, for the near and long future ,and continue to be one of the pillars of the local economy. Once the political decision is taken, it is time to go to work.

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