Many people in Curaçao no doubt breathed a sigh of relief Monday over news that “Petroleos de Venezuela” PDVSA will continue to operate the Isla refinery for another year (see related story). A possible closure of the plant that provides about 1,000 direct and hundreds of indirect jobs when the current lease contract ends on December 31 was thus averted, at least for now.
The negative impact of such would have simply been too far-reaching also regarding fuel security not to seek a transitional arrangement now that the process of finding a new operator is taking longer than desired. While the refinery has been mostly idle in the past two years due primarily to the ongoing crisis in Venezuela, technical problems with the separate government-owned Curaçao Refinery Utilities (CRU) plant that services Isla and recently the impact of US sanctions against the South American nation’s regime and by extension PDVSA, the latter’s on-island subsidiary “Refineria Isla” kept on personnel and continues to pay them.
However, less use was understandably made of maintenance contractors that consequently laid off a great number of workers, several of whom have since moved to the Netherlands. The harbour and especially tugboat company KTK suffered from the lack of oil tankers calling on the island as well.
A new licence obtained by the Dutch Caribbean country from the American Office for Foreign Assets Control (OFAC) allows PDVSA to operate Isla only to pay local bills. The intention is to bring in more crude for processing and do what it takes to get the refinery with a maximum capacity of 335,000 barrels running at its “normal” average output of some 220,000 again, including re-establishing agreements with contractors to work there.
It’s obviously not an ideal scenario, but certainly better than suddenly having thousands of persons on the breadline from one day to the next in an already slumping economy. Mind you, that’s important for the monetary union shared with St. Maarten, because a continued negative balance of payments sooner or later could start affecting the value of their joint national currency the Netherlands Antillean guilder and its peg to the US dollar, with all possible consequences.
