| SAN JOSE, Costa Rica, June 20
SAN JOSE, Costa Rica, June 20 Costa Rica has
halted its Chinese-backed plan for a $1.5 billion oil refinery
upgrade after accusing the contractors of using a subsidiary of
the China National Petroleum Corporation to run a feasibility
study on the project, officials said on Thursday.
Cost Rican Energy Minister Rene Castro told reporters Costa
Rica's Comptroller's Office considered the company that carried
out the study, Huanqiu Contracting & Engineering Corp, a unit of
CNPC, which has been working jointly on the plan with Costa
Rican state-run oil company Recope.
"We found the project breached one of the clauses in the
joint company agreement because the feasibility study ... was
done by a firm associated with the Chinese state-run oil
company, something expressly forbidden in the same agreement
signed by both companies", said Navil Campos, head of the
investigations department at the comptroller's office.
The plan to modernize the refinery in Moin, next to the
Caribbean port of Limon, is aimed at improving the quality of
the refined fuel and seeks to increase production at the
refinery to 65,000 barrels per day from 18,000 bpd.
Huanqiu Contracting & Engineering Corp could not be reached
for comment about the decision. The company's website has a link
Campos said other deficiencies were found in the feasibility
study, including its failure to include an estimate of the
overall cost of the upgrade or risk analysis.
A few hours after the announcement, Recope's head Jorge
Villalobos resigned, Castro said.
The Costa Rican government said Recope had been instructed
to find another company to undertake the feasibility analysis.
Castro said that "it was still a possibility" for the project to
go ahead jointly with CNPC.
The suspension of the project follows a visit to Costa Rica
by Chinese President Xi Jinping in early June, when the Costa
Rican government said it was not ready to sign off on the
(Reporting by Isabella Cota; Editing by Mohammad Zargham)