Houston-based Citgo Petroleum has slowed work on an overhaul of its 235,000-barrel-per-day Aruba refinery due to a lack of financing stemming from U.S. sanctions on Venezuela's state-run PDVSA, the refining firm said.
Sanctions imposed last year by the United States on
Venezuela have limited access to long-term credit for PDVSA and its
subsidiaries, affecting many oil projects in the South American country
and Caribbean islands where they operate.
"Citgo Aruba ... needs to slow down the refinery revamp project
due to sanctions by the U.S. government on PDVSA which are not allowing
us to get additional financing for the project," the unit said in a press release late on Tuesday.
The Caribbean refinery has been leased since 2016 by Citgo,
the U.S. refining subsidiary of PDVSA, under a 25-year agreement with
the Aruba government that also includes an extensive $685 million
overhaul aimed at restarting operations at the inactive refinery and converting the facility to a crude upgrader.
"We are working hard to find a solution and hope to fully resume the project in the near future," said James Cristman, Citgo's refining vice president, in the release, adding that 600 workers had been hired for the project.
Citgo Aruba did not say how long work would be delayed at the
refinery, which has remained idle since 2012. The Aruba government
declined to comment.
At the end of 2016 two consortia, including Japanese engineering firm
JGC Corp and French oil services company Technip, were shortlisted to
handle the refurbishment.
Months later Citgo asked its cash-strapped parent company PDVSA to
provide initial funding of $100 million, according to an internal
document seen by Reuters, but the credit was not granted and there has
been little progress since then due to the lack of financing. (Reporting
by Sailu Urribarri in Jacksonville, written by Marianna Parraga;
Editing by Tom Brown).
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