WILLEMSTAD - Credit rating agency S&P is gloomy about the economy of Curaçao and lowers the credit status of the country. The main reason for the reduction is the growing uncertainty about the future of the Isla refinery on the island. This is pushing down economic growth in the coming years, reports S&P.

The credit status was reduced one step, from A- to BBB +.

The decrease is indirectly caused mainly by the crisis in neighboring Venezuela. The refinery is leased by the Venezuelan state oil company PDVSA, which again suffers severe US sanctions. At the moment the refinery is not operating.

The contract with PDVSA expires this year, and the Curaçao government has not yet succeeded in finding a new tenant.

The US has imposed severe sanctions on Venezuela because President Nicolas Maduro refuses to resign and allow Juan Guaidó to continue as president of the country. Oil is used by the US as a means of pressure to force Maduro to resign.

Under the sanctions it is forbidden to do business with PVDSA. And even the Russian Gazprombank is complying with those agreements, it became known yesterday. Russia supports Maduro, but the bank is ultimately more afraid of US sanctions.

S&P does not think that there will be a new write-down for the time being. The expectation is further stable, Curaçao is in good shape thanks to the strong connection with the Netherlands and the assets of pension funds.

There are some major concerns though: if the government fails to find a new operator or strategic partner for the refinery and the growth of the already moderately performing economy of the island continues its current trend, the rating agency may lower the status further in the next 12 to 24 months.