Published On: Mon, Jun 18th, 2018

Curacao’s Isla refinery working at minimum, awaits Venezuelan crude

Oil RefineryWILLEMSTAD - The Isla refinery operated by state-run oil firm PDVSA is working at minimum capacity while awaiting new shipments of Venezuelan crude

PDVSA’s operations this year have been mired by problems ranging from fast-declining crude production and poor refining due to a lack of equipment to obstacles for shipping oil amid port congestion and financial sanctions.

Only a few units at the refinery in Curaçao have been operating amid U.S. producer ConocoPhillips’ moves since May to seize PDVSA’s Caribbean assets. No shipments of Venezuelan oil have been sent to the refinery since late April and none were planned for this month, according to PDVSA internal trade documents.

New crude cargoes could be received by Isla through ship-to-ship, or STS, transfers that would add to its existing inventories and be processed in the coming weeks, sources close to the refinery said.

PDVSA started using sea-borne transfers earlier this month to ease a bottleneck of tankers around its main oil ports that have affected crude exports to customers from the United States to China.

The STS also could help PDVSA to avoid a new seizure in Curaçao, where Conoco temporarily retained inventories last month until a local court ruled that oil to be processed at Isla should not be subject of legal actions, while fuel leaving the facility would be distributed domestically.

Proceeds from Isla fuel sales are to be held in escrow until the legal dispute is resolved, the court decided last month.

The Venezuelan company has since avoided shipping oil to and from at least three Caribbean islands.

“PDVSA has promised the refinery that a new cargo of crude will be delivered. It’s an agreement the parties have already reached,” one of the sources said.

It was not immediately possible to know how much crude Isla is currently processing, but most operational units remain out of service due to a major planned maintenance that started in the first quarter, the sources said. The refinery was supposed to fully restart last month.

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