Curacao inks deal for new operator, revamp of Emmastad refinery

Curacaoan state-controlled Refineria Di Korsou NV (RdK) has signed an asset purchase and sale agreement (APSA) with privately held Klesch Group, under which Klesch will take operational control of RdK’s 320,000-b/d Isla refinery at Emmastad, Curacao, as well as an associated utilities plant and the Bullenbay oil terminal.

With the APSA now signed, the parties will continue working to meet the agreed conditions, with the aim of signing two remaining agreements by the end of second-quarter 2020 to finalize the deal, the companies said in a joint release.

As part of the agreement, Klesch has initiated major investments in upgrading refining and other equipment at the sites to improve processing, storage, and environmental performance, and will pay $15 million annually, subject to an inflation rate of up to 2%, to lease the lands on which the assets are located, according to a release from the government of Curacao.

Curacao’s proposed deal with Klesch follows the government’s process beginning in February 2019 to find a new operator that could ensure long-term viability of the refinery and storage assets following expiration of soon-to-be former operator Refineria Isla Curazao BV’s—a subsidiary of Venezuela's state-owned Petroleo de Venezuela SA—lease in 2020.

Refineria Isla Curazao—whose official lease was set to expire on Jan. 1, 2020—will temporarily continue to operate the refining and storage assets until Klesch officially takes over, according to local media reports out of Curacao (OGJ Online, July 3, 2017).

A definitive timeframe for Klesch’s takeover, however, has yet to be confirmed.

The government of Curacao previously attempted a transaction with China’s state-owned Guandong Zhenrong Energy Co. Ltd. for transfer of operatorship of the Emmastad refinery and terminal assets in 2016 in a deal that later failed (OGJ Online, Mar. 8, 2018; Nov. 14, 2016).

The Bullenbay oil terminal includes 39 tanks with a combined total of 17 million bbl of installed storage capacity, according to a March 2019 circular from Curacao’s government.