Gas & Petroleum Exploration

It looks like RDA has a new fancy building, filled with office furniture and equipment. Where did the money come from? From slashed budgets of social organization, who will receive just about half of what they budgeted to stay alive, in 2017. Meaning Casa Cuna Progresso, Pasa Dia Brillo, SABA (Stichting Algemene Bejaardenzorg Aruba), will have to get by with less. As you know, the badly-printed ad in the newspapers just recently, touting Gas Y Petroleo, signed by the MinEnergy, tickled my curiosity. So I asked a few people for a report on the refinery.

Here are my findings:

“Rona, we also keep asking where the worker bees are, the so called boots on the grounds, which were supposed to open, clean and inspect the refinery process equipment. Well, it seems now that the date has been pushed back to Oct 1st. Y & V, from Venezuela, makes up part of the consortium, the other contractor is Technip from France. Their joint venture is called YTT Y&V, they also brought a sub-contractor in from the U.S., Bay Ltd. out of Corpus Christi, Texas. We have a mothballed refinery in need of rehab, and GOA is determined on upgrading it to a facility capable of upgrading 209.000 barrels per day.“

As I reported in December 2016, the rehab was delayed by eight months to July 2017. It’s September now, and with the first boots on the ground on October 1st, the planned restart of the refinery will be postponed to late 2018 from an original earlier target date.

It’s been almost two years since CITGO, the US subsidiary of Venezuela’s financially quagmired nationalized oil company PDVSA agreed to lease RDA, which closed in 2012. It’s a 15 years lease.

And because RDA was closed for 15 years, major upgrade work must take place, so that the extra heavy useless crude oil from the Orinoco, can be commercialized.

If this happens it’s good for Venezuela, if they handle the business in an ethical, transparent manner, which is practically impossible as Venezuela is only concerned with prolonging the life of the Maduro regime, NOT the improvement of the lives of its citizens.

To date, logistical and financial obstacles prevented the work from starting, but we now have a number of companies involved, Y&V from Venezuela for detailed inspection, construction and repairs, and a French contractor Technip France JV. They are both jointly referred to as YTT Aruba NV, they say they need about $600 million as a budget, but the number is probably closer to $700-$800, maybe much more, to overhaul the rust bucket.

The project is complex and it also requires the construction of a man camp, temporary accommodations for up to 1,500 workers, that’s an approximate investment of Awg 12 million. The contract to build the man camp was awarded to a Venezuelan company by the name of Constructora Azzurra, C.A. The catering of the project, feeding all these people, went to Manpotech. Have no clue who they are.

Not surprisingly, the man camp, a serious construction project of dormitories has been delayed. Think about it. The WEB and ELMAR infrastructure also requires millions.

Naturally, no financial plan is available anywhere. There’s talk about a bridge loan, but the money, the financing scheme of the whole shebang is still a mystery.

But we at least we know who is in charge: VP & GM, the man at the helm is Raymon Buckley with the upgrade leadership by GM Raul Baradat.

Talk is cheap. And they are talking about natural gas as the main source of fuel for the Aruba upgrader. So they still have to develop the required infrastructure, install the famous pipeline from Venezuela’s gas system, run an on shore pipe on 90-km, and an off shore pipe for 32 km. Not to forget the engineering and environmental impact, which must be studied.

Do you believe in Santa?

Then you will believe all that. You understand that the project cannot start until the financing is in place. So far No Hay Dinero.

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September 15, 2017
Rona Coster