Published On: Mon, Aug 20th, 2018

Curaçao relieved: seizure of Venezuelan state oil company lifted

PDVSAWILLEMSTAD - Curaçao is relieved by the fact that the American oil company ConocoPhillips has lifted all the seizures at the refinery operated by the Venezuelan state-owned oil company PDVSA on the island.

The supply of fuel to Curaçao was severely affected by the seizures. The Americans had seized the installations, ships and bank balances of PDVSA on Curaçao, Bonaire and St. Eustatius to force Venezuela to pay compensation for the nationalization of their projects in Venezuela, ten years ago.

The issue has been resolved now that the Venezuelan state oil company has agreed to a compensation of two billion dollars. PDVSA must pay for it because of a ruling in an arbitration case at the International Chamber of Commerce in Paris (ICC).

The American measure had major consequences for fuel delivery on Curaçao and for the Venezuelan refinery on the island. Venezuelan oil tankers were no longer able to moor in Curaçao, as a result of which the refinery almost completely went inoperative.

The government of the islands cleared the supply of fuel to Curaçao and Bonaire by means of summary lawsuits. But the production of the refinery, which can refine 330,000 barrels of oil per day, went back to 50,000 barrels.

The future of the refinery remains uncertain, despite the lifting of the seizure. The contract with Venezuela will expire next year and it is not clear whether the operation can be continued after that and which operator would do so. An amount of three billion dollars is needed to modernize the refinery.

Also on Bonaire people were shocked by the urge to act of the Americans. The oil transfer company Bopec on Bonaire is owned by PdVSA and the only supplier of oil for the power plant.

St. Eustatius, another special municipality of the Netherlands, was also affected. The American company NuStar operates an oil transfer company there and leases tank capacity to PdVSA.

Venezuela cannot pay the amount at once. It has been agreed to pay 500 million at once and the remainder in quarterly installments over a period of 4.5 years. The payment is allowed, despite the sanctions that America has imposed against Venezuela.

Incidentally, there is another arbitration case at the World Bank. That would be an amount of 20 billion dollars in compensation money.

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