December 24, 2019 / 2:12 PM / 25 days ago

Curacao signs agreement with Klesch to operate Isla refinery

(Reuters) - Curacao’s state-run refining company, Refineria di Korsou (RdK), said it has signed an agreement with industrial commodities conglomerate Klesch Group to operate the island’s 335,000-barrel-per-day Isla refinery and storage facilities.

The asset purchase and sale agreement, signed on Sunday, entails the sale of the Isla complex including its oil storage terminal, with a long lease on the land, according to a statement by RdK.

RdK has been searching for a replacement to Venezuela's Petroleos de Venezuela (PDVSA) as operator of the refinery and in September entered into exclusive talks with Klesch.

The search began after a dispute last year between the Venezuelan company and U.S. oil producer ConocoPhillips left the plant idled amid attempted asset seizures.

PDVSA’s contract as operator of the refinery expires at the end of the year, but it has agreed to remain until Kresch can take over fully. PDVSA had sought a contract renewal but won only a temporary continuation earlier this month.

The agreement would put Kresch in charge of the Bullenbay oil terminal, with its 17.75 million barrels of storage and blending capacity. Bullenbay is where PDVSA had received imported light oil that it mixed with its own extra heavy crude to create an exportable blend.

RdK said it aims to sign two remaining agreements with the privately held Klesch over the next year. Klesch, which owns and operates the Heide refinery in Germany, has offices in London and Geneva.

Reporting by Shariq Khan in Bengaluru and Sailu Urribari; Editing by Arun Koyyur and Steve Orlofsky

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