Venezuela PDVSA says Isla refinery lease not up for negotiation yet
CARACAS, Sept 22 (Reuters) - Venezuelan state oil company PDVSA on Thursday said its lease of Curacao's Isla refinery was not up for negotiations yet, days after the island announced a preliminary deal with China's Guangdong Zhenrong Energy to operate the complex.
PDVSA has for decades operated the refinery, which opened in 1918, under a lease agreement. But the cash-poor company has been reluctant to invest some $1.5 billion that Curacao authorities requested several years back to modernize the 335,000 barrels-per-day facility.
Curacao's government said on Monday it has signed a preliminary agreement with Guangdong Zhenrong Energy to operate the aging Isla refinery and invest some $10 billion in upgrading the facility, storage terminal and dock.
In a statement on Thursday, PDVSA said it was "very early" to start a negotiation to renew its deal in Curacao.
"Our commitment and the operational continuity of the Isla refinery are part of our company's strategy in the short, medium and long term," PDVSA said in a statement.
It did not mention the Chinese company. The Caracas-based company did not immediately respond to requests for details.
Curacao Prime Minister Bernard Whiteman said in a video posted on the government's website on Monday that "unfortunately, all the government's efforts to reach a new contract with Venezuela did not yield positive results."
Located just 50 kilometers (31 miles) northwest of Venezuela, the Isla refinery is a strategic facility for PDVSA to store and ship Venezuelan oil destined for the Asian market. China in the last decade has become one of the top buyers of Venezuelan crude and fuel through an oil-for-loans financing agreement.
The current lease agreement with PDVSA stipulates that if neither party ends the agreement two years before its expiration, it is automatically renewed for another 10 years. The current lease expires on Dec. 31, 2019.
Residents of Curacao, an autonomous country within the kingdom of the Netherlands, have for years complained that Isla's emissions cause health problems and insist the facility needs investment to reduce its environmental impact. (Writing by Alexandra Ulmer; Editing by Chris Reese)
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