WILLEMSTAD - The companies that submitted a non-binding proposal last month for the takeover of the refinery will receive a non-exclusive Letter of Intent (LoI).
"An important step in the search for a strategic partner," says Refineria di Kòrsou (RdK) in a press release.
The signing of the non-exclusive declaration of intent gives government company RdK and the selected parties "room and opportunity" to continue the negotiation talks and to submit binding proposals. The negotiations will take place in the coming three months. The intention is that an agreement is signed by November with the new partner who will manage and operate the refinery.
The process has so far been in accordance with the plan set out in February. The Project Management Organization (PMO) does its utmost to ensure that the refinery remains open. "As the Curaçao government has ordered RdK," said the press release.
The contract of the Venezuelan state oil company PdVSA, which operates the refinery under the name Refineria Isla, will expire at the end of this year. The PMO team is looking for a new partner for the Curacao government that not only wants to operate the refinery but also wants to invest in the modernization of the installations. Marcelino de Lannoy, RdK interim director, said last week that one or two of the parties which submitted a non-binding proposal in August were selected for further negotiations.
It is customary to sign a form of a letter of intent for such a large investment. In a LoI, for example, agreements can be laid down about a due diligence, the price and the timeline of the takeover.
The press release shows that RdK is hopeful that a contract will be signed with a new partner before the end of the year. In the meantime, a tanker with oil is eagerly awaited. At Isla's request, one of the six steam boilers from Curaçao Refinery Utilities (CRU) is back in operation and supplies 84 percent of the available capacity. According to De Lannoy, that is sufficient at the moment.
CRU is owned by RdK. The steam is needed to heat up the units while waiting for oil and to start the refining process. But despite earlier commitments from Venezuela to the staff, oil has still not come. Apri union chairman Gherrel Remilia says that the union has not yet made a decision now that PdVSA does not seem to keep the promises. "We are waiting."
