what is going on or not going on lately with the refinery?
have workers begun the renovations or upgrades? (i am not sure what to call the work that has to be done to get the place where it needs to be, to be operational.
Today NY Times had an extensive online article about Venezuela. Part of the article dealt with the dire strait of the oil industry there
Here is an excrept from the article as it relates to Aruba and the refinery
Note This article was dated today. The fact that CITGO is now looking to borrow would tell me that plans for the refinery have not progressed much contrary to what the politicians in Aruba and Venezuela say.
Here is the excerpt:
Last year, Citgo borrowed $2.5 billion to keep PDVSA afloat. And now it plans to borrow an additional $800 million to update a refinery on the island of Aruba to produce synthetic light oil, according to executives who have been briefed on the plans.
Mr. Centeno, the union leader, said Venezuela’s state oil company had become so strapped that it had stopped providing its workers with new boots, helmets and gloves.
“PDVSA is on the floor now,” he said.
Nicholas Casey reported from El Furrial, and Clifford Krauss from Houston. Jesymar Aņez contributed reporting from El Furrial, and Patricia Torres Uribe from Caracas, Venezuela.
G.D Bless socialism .I think we are safe from refinery in nearest 100 or so years.
You may be "safe from the refinery..." but I rather thought many hundreds of Aruba Citizens were looking forward to the jobs that the refinery hopes to bring. But hey.... Each to their own eh ??
Article today from Reuters basically stating that Citgo is waiting for PDVSA, their parent company to initially invest $100m before they would commit the remainder of investment money... Think it's wait and see still I'm afraid...
Exclusive: Citgo asks PDVSA for $100 million to revive Aruba refinery - document
By Marianna Parraga | HOUSTON
Citgo Petroleum, aiming to start a $685 million renovation project to revive Aruba's idled refinery, has asked its cash-strapped parent company PDVSA to provide initial funding of $100 million, according to an internal document seen by Reuters.
The U.S.-based refining firm in June received approval from Aruba's government to refurbish, restart and operate the 235,000-barrel-per day idled refinery and an attached terminal under a 25-year lease contract.
The importance of Aruba as a facility to be used by PDVSA and its subsidiaries has increased in recent weeks since the parent company could be forced out of neighboring Curacao, where it currently operates the 335,000-barrel-per-day Isla refinery and a storage and blending terminal.
Aruba and Curacao are strategically located in the middle of the route from Venezuela to the United States or Europe, and PDVSA needs facilities in the area to process and store its oil before it is exported.
Citgo, which had planned to start the renovation project in August, has faced delays due to last minute disagreements between the government of Aruba and the facility's previous owner, U.S. Valero Energy (VLO.N), two sources close to the talks said.
Lack of capital has also contributed to the delays. PDVSA has this year focused on paying foreign debt and its PDV Holding unit has not yet transferred the $100 million loan to Citgo, according to one of the sources. In the meantime, Citgo is trying to raise private financing for the restart.
"We are looking for project or construction financing from any financial entity, major market player or policy-based financial institution," the document, written in August, said.
Citgo and Valero declined to comment. The Government of Aruba did not respond to requests for comment.
The company's Citgo Aruba Refining unit expects to receive bids on Thursday for the restoration project, the sources said. The first of two crude units would be restarted in mid-2017.
STEP BY STEP The whole project would be finished by mid-2018 and turn the crude distillation units into crude upgraders capable of converting 209,000 barrels per day (bpd) of Venezuelan diluted crude oil (DCO) into some 90,000 bpd of a medium crude of 22 API degrees of density and 0.98 percent of sulfur content, the document said.
The upgraded oil will be almost entirely exported to Citgo's refineries in Lake Charles, Louisiana and Corpus Christi, Texas.
Citgo Aruba Refining also expects to produce fuels for the island's domestic market and some 60,000 bpd of naphtha for PDVSA, which uses this product to dilute its extra heavy oil, according to the document.
Citgo expects to sign a new supply contract with PDVSA to lift diluted crude oil at Venezuelan ports. The companies estimate the Aruba refinery will generate a cashflow of some $220 million per year, the document said.
IN NEW HANDS
The transfer of the refinery and its terminal to Citgo was initially planned for early September, but a termination agreement between the government and Valero has taken more time than expected to be finalized, one of the sources said. Aruba's government and Citgo are also waiting for the island's parliament to give final approval to the deal.
"There have been disagreements related to the transfer of the terminal. Aruba also wants to make sure the island will receive enough refined products from the refinery," the source said.
In the meantime, six consortia of private contractors interested in the revamp have formed in recent days, according to the sources.
The consortia include Venezuela's Vepica, Tecnoconsult, Tivenca, Den Spie and Inelectra, Spain's Pentech, France's Technip (TECF.PA) and Japan's JGC Corporation (1963.T), which were recently pre-qualified.
Last edited by elephant_guy; 09-21-2016 at 03:37 PM.
Rona's column today:
The refinery law goes to Parliament Monday afternoon
I looked at a number of documents, and I am stressed, the suggested law going to Parliament, the legal framework that will start the refinery-ball rolling, is very unfavorable to the island. Many of my friends posted commentaries on line, and I used some of their materials.
Basically, regarding the Definitive Participation Agreement, Parliament is being asked to ratify the agreement the MinEnergy negotiated with CITGO for the lease of the refinery, and while some details of what it entails were made public, many are unclear and undefined.
WHAT CAN SAVE US?! It CITGO is unable to get the needed US$100 million, from its parent company PDVSA, which this week was downgraded from CCC rating to CC, by Standard & Poor, which means it went from vulnerable to very vulnerable. When asked if concerned about the downgrade of PDVSA, the MinEnergy said that the island’s agreement was with CITGO. Duh.
Getting the legal documents to Parliament for perusal and study was like pulling teeth. The opposition had to threaten to complain to the governor, in order to get copies of the suggested law into their hands, and then members of Parliament only had FOUR days to study the materials carefully, before the public debate in Parliament.
The MinEnergy was secretive about the whole process, as the documents traveled from the board of CITGO and its Ladder of Command, to the board of Valero and its Ladder of Command. It is our Parliament’s turn now. The papers will later travel to the governor’s office, a true via dolorosa.
My friends who saw parts of the agreement report that it is VERY unfriendly towards us, because the MinEnergy seemed to have written it by himself, not a single expert by his side, not from Shell, nor from Delft University of Technology, not even from the Rietveld Art Academy. Someone. Someone would have been better than no one. Anyway, if they had one of these experts on board he/she would have voted against the move, and tell us to fohgeddaboudit, the reopening of the refinery is baloney.
But the MinEnergy is in a rush, he wagered his entire political career on the opening of the refinery, so he agreed to the following, and I am quoting: “In the event of breach of contract by THE GOVERNMENT OF ARUBA and/or RDA, CITGO, at its discretion, shall have the right to: (i) demand compliance and obtain enforcement of THE GOVERNMENT OF ARUBA’s and/or RDA’s obligations under the Definitive Participation Agreement and the Lease Agreements, (ii) terminate or declare annulment of the Definitive Participation Agreement or Lease Agreements, in which event CITGO’s right to claim compensation as the Signatories may agree on during the Definitive Participation Agreement period.”
Wow, did you get it? That said that in the event that Aruba or RDA, Refineria di Aruba, makes the smallest mistake, let’s say there is a current interruption, then CITGO can immediately terminate the contract and demand compensation of minimum 300 millions, and that amount could go up to 600 of 750 million, if CITGO indeed makes the investment.
So our Parliamentarians will be asked to approve a government guarantee on Monday; that guarantee may increase to one billion florins, and could be collected at a drop of a hat by CITGO. They may operate here for three months, then decide that RDA did not fulfill its obligations, and ship out of here, leave the island with a steep invoice; it means that we each owe a lot of money to CITGO for their investment here, every man, woman, and child, must pay up.
The agreement allows instant termination, no grace period; CITGO may demand immediate payment, and ship out.
My friends conclude it is a huge risk, under the actual terms the refinery deal delivers more risk than benefits.
For those interested: This is a document prepared by the MinEnergy office, it will give some English speaking readers an idea, of what the government’s story is:
Quote from Bloomberg: ”The operating assets of CITGO Holding Inc., PDVSA’s U.S. refining subsidiary, are already pledged to creditors. The unit’s $1.5 billion bonds due in 2020 are secured by a 100% percent equity stake in CITGO Petroleum Corp.”
What I said in April stand: The whole exercise is designed to sooth voters and avoid having to make tough budget decisions. One of my smart friends writes: “We seem to knowingly undertake enormous financial and environmental risks which someone else will have to clean up in future. Think about the implication of an open yet crumbling refinery as far as environmental, health, safety and many other liabilities.”
I am stating the obvious but the government of Aruba is under tremendous pressure from CAFT and if the refinery start-up will make up for the AWG 50 million shortfalls in the 2016 budget, halleluiah, but at what cost?
Jacki ~ loving Aruba from NJ
Rona's latest on the Refinery:
https://batibleki.visitaruba.com/8am...inery-nothing/What’s Happening at the Refinery? Nothing
I wrote two positive articles about RDA in January; things looked up when a consortium formed by France’s Technip and Venezuela’s Tecnoconsult and Y&V Group was picked to refurbish the refinery. Technip was a serious partner and remember they said they were willing to finance the $700 million project, which could take up to 18 months, IF when done they could pay themselves, let’s say $800 million, why not, they made the investment, took the risk, they should be allowed to make some money on it.
So I wrote some positive articles, Yuppie, we’re gonna have a 225,000-barrel per day refinery, someone in the region must help Venezuela dilute its heavy, sticky crude oil, in order to formulate exportable crude blends. If they manage to improve the quality of the product, and fetch $10 dollars MORE per barrel, per day, that’s a huge income. Why not Aruba, right?
Not so fast, cowboy. Apparently the French changed their mind because the deal was too risky, the collateral belongs to RDA not to CITGO Petroleum, so the deal fell through, the French walked away, and so far no one else showed up to take their place.
So what’s happening at RDA right now? Nothing.
This week we were treated to a picture opportunity as so called 100 badges were handed out at the Lab Building to so-called 100 workers of four so-called major contractors entrusted with the rehabilitation of the refinery.
Which is a partial fabrication! There are presently some people working at RDA but their work has to do with safety, not rehabilitation. The maintenance people are just making sure the area is safe for the estimators, charged with estimating, the scope of work, and the size of the investment required.
At the moment, they have no clue if $600 or $700 million are required to resurrect RDA, idle since 2012 when it was shut by the previous operator, U.S. Valero Energy.
Guestimating how much money would be required is a difficult task, and until they know how much they will be asked to spend, CITGO senior management is afraid to pull the trigger.
And don’t believe anything else anyone tells you.
You should also know that, PDV MANTENIMIENTO N.V., is bringing in Venezuelans to work in the refinery rather than hiring good, experienced Arubans who are standing outside the gates ready, willing and able to go to work.
PMEC PROJECT MANAGEMENT AND ENGINEERING CONSULTANCY N.V., a company reportedly belonging to Mike De Mesa has also hired Venezuelans to work in the refinery rather than hiring the experienced Arubans.
And don’t believe anything else anyone tells you.
PMEC PROJECT MANAGEMENT AND ENGINEERING CONSULTANCY
Business name: PMEC PROJECT MANAGEMENT AND ENGINEERING CONSULTANCY N.V.
KvK nr: 37367.0
Business Address: AMSTERDAMSTRAAT 33, SAN NICOLAS NOORD
Business name: PDV MANTENIMIENTO N.V.
KvK nr: 45539.0
Business Address: L.G. SMITH BLVD. 62, SUITE 301, ORANJESTAD WEST
Jacki ~ loving Aruba from NJ
sad state of affairs, especially when the Aruban people are supposed to be the first ones to get jobs on their own island....what ever happened to that law I wonder ??
Many people that should be working (even with what little they are doing at the refinery) once again have that dangling carrot pulled up and out of reach......
ARUBA....HOME AWAY FROM HOME