Published On: Wed, May 9th, 2018

Prime Minister: Curacao sees ‘potential crisis’ from Venezuela-Conoco row

Rhuggenaath2WILLEMSTAD - A legal dispute between ConocoPhillips and Venezuelan state oil firm PDVSA could leave Curaçao’s economically important Isla refinery without crude oil to process, posing a “potential crisis” for Curaçao’s, the Prime Minister said.

Conoco has won court orders allowing it to seize PDVSA assets on Caribbean islands, including Curaçao, in efforts to collect on a $2 billion arbitral award linked to the 2007 nationalization of Conoco assets.

The operations of the 335,000 barrel-per-day Isla refinery, which provides as much as 10 percent of Curaçao’s gross domestic product, could be left without crude supplies if PDVSA halts all oil shipments to prevent them from being seized, Prime Minister Eugene Rhuggenaath said.

“We are aware of the potential risks for the operation of the refinery,” Rhuggenaath said. “A stoppage of the operation would have a devastating impact economically and socially.”

PDVSA has already suspended oil storage and shipping from its Caribbean facilities, according to a PDVSA source.

Curaçao is prepared to purchase refined products on the global market to ensure it can maintain supplies for the local population as well as for shipping.

“This is indeed a potential crisis that can very profoundly affect the social and economic situation of our island, and therefore we are always willing to discuss and reach out to relevant parties,” Rhuggenaath said.

He said Conoco has yet to seize any assets. Curaçao is still scrutinizing a lien - a legal instrument that paves the way for an asset seizure - because the government’s legal counsel does not fully understand it, he said.

Conoco is also seeking to seize assets on the nearby island of Bonaire, where PDVSA owns a storage terminal. In contrast, Isla is owned by the public company Refineria di Korsou (Curaçao Refinery)and is leased to PDVSA.

“This is a different situation than in Bonaire,” said the Prime Minister.

Neither PDVSA nor Conoco has contacted Curaçao authorities regarding how the legal dispute could affect the island, according to Rhuggenaath.

ConocoPhillips said it has sought to resolve issues caused by its efforts to collect the arbitration award.

“We have been in touch with the local officials and are working to address their concerns,” spokesman Daren Beaudo said. “As we said previously, we will work with the community and local authorities to address issues that may arise as a result of enforcement actions.”

PDVSA did not immediately respond to an email seeking comment.

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