Feb 21 (Reuters) – Houston-based Citgo Petroleum has slowed work on an overhaul of its 235,000-barrel-per-day Aruba refinery due to a lack of financing stemming from U.S. sanctions on Venezuela’s state-run PDVSA, the refining firm said.

Sanctions imposed last year by the United States on Venezuela have limited access to long-term credit for PDVSA and its subsidiaries, affecting many oil projects in the South American country and Caribbean islands where they operate.

“Citgo Aruba … needs to slow down the refinery revamp project due to sanctions by the U.S. government on PDVSA which are not allowing us to get additional financing for the project,” the unit said in a press release late on Tuesday.

The Caribbean refinery has been leased since 2016 by Citgo, the U.S. refining subsidiary of PDVSA, under a 25-year agreement with the Aruba government that also includes an extensive $685 million overhaul aimed at restarting operations at the inactive refinery and converting the facility to a crude upgrader.

“We are working hard to find a solution and hope to fully resume the project in the near future,” said James Cristman, Citgo’s refining vice president, in the release, adding that 600 workers had been hired for the project.

Citgo Aruba did not say how long work would be delayed at the refinery, which has remained idle since 2012. The Aruba government declined to comment.

At the end of 2016 two consortia, including Japanese engineering firm JGC Corp and French oil services company Technip, were shortlisted to handle the refurbishment.

Months later Citgo asked its cash-strapped parent company PDVSA to provide initial funding of $100 million, according to an internal document seen by Reuters, but the credit was not granted and there has been little progress since then due to the lack of financing. (Reporting by Sailu Urribarri in Jacksonville, written by Marianna Parraga; Editing by Tom Brown)

Bron: Reuters