Curacao Refinery Struggling After Strike

www.wilmingtonstar.com Last changed: March 12. 2003 5:43PM By KATY DAIGLE Associated Press Writer Curacao's refinery is to resume full production in the next several days, after weeks of sitting idle as a strike stemming from political strife in Venezuela blocked crude oil supplies for two months. But it's going to take time for profits to return to Refineria Isla, which was forced to give up most exports and restrict shipments to a small domestic market and Venezuela. "When the strike started we lost all of our international clients," said Norbert Chaclin, the refinery's managing director. As a result, it is suffering monthly losses of about $9 million, he said. The refinery, owned by the local government of this Dutch Caribbean island and leased by Venezuela's state-run Petroleos de Venezuela S.A., is processing 150,000 barrels of crude a day. By next week, it should have its main catalytic cracker back online after routine maintenance and expects to turn out its full capacity of 210,000 barrels a day, Chaclin said. The ramped up production could provide some relief to energy markets. Gasoline prices have soared in recent months as crude oil costs have climbed to levels not seen since just before the Gulf War amid heavy demand and tight inventories. Oil production dropped drastically in Venezuela during the strike, called Dec. 2 by opponents of President Hugo Chavez to press demands for early elections. Shipments stopped arriving in Curacao for several weeks in December and January but resumed before the strike petered out last month. The refinery currently is sending regular shipments of gasoline and jet fuel to Venezuela, located just 37 miles away. Traditionally, it sends 43 percent of production to the Caribbean and Central America, 20 percent to the United States and Canada, 22 percent to South America, and sells the rest in Curacao and neighboring Bonaire. A sprawling expanse of metal pipes, chemical converters and concrete by Willemstad's bay, the refinery is Curacao's largest business and employer, with 1,030 workers and about 350 contract workers. When running normally, it contributes an estimated $120 million a year to the economy through contractor fees, salary taxes and duties, said Chaclin. The slowdown has hit the federation of the Netherlands Antilles, including four islands and St. Maarten. Its revenues from taxes and shipping fees have dropped about 15 percent each month since December, Economy Minister Errol Cova said. The refinery produces gasoline, lubricants, jet fuel, propane and other products. It also is one of the largest oil transshipment terminals in the Caribbean, with storage capacity of 17 million barrels. Before the strike, Venezuela was the world's fifth largest oil exporter and a major source for the United States, accounting for about 14 percent of U.S. oil imports last year or 1.3 million barrels of crude and refined gasoline.