21 December 2010

China Leases Petroleum Storage Facility in St. Eustatius

China's refinery deal helps Cuba's oil exploration


It was announced this week that China's National Petroleum Corporation had signed a US$6 billion agreement for an oil refinery important to Cuba's drilling explorations.

The refinery, located in Cienfuegos province, is jointly owned by Cuba and Venezuela. Caribbean analysts see the latest Chinese investment in Cuba as another example of the increasing role China has been playing of late in the search for oil in Latin America and the Caribbean.

In the past two years, Chinese investments have also financed energy projects and formed joint ventures in Venezuela, Brazil and Ecuador.

In addition, China has leased a petroleum storage facility on St Eustatius in the Netherland Antilles,  * the Dutch-speaking Caribbean islands.

There have also been reports in the Caribbean and US press that China's national oil corporation has been having talks with the Texas-based refining giant, Valero, about purchasing its refinery on Aruba, another Dutch island. But these China initiatives are only a few of the many being undertaken in the Caribbean and Latin America by international oil giants and rising oil companies.

In the Dutch Antilles, the US-based Hess Oil Corporation and Venezuela's national oil company Petroven jointly run a major oil facility in Curacao, the main island in the Dutch chain.

In the English-speaking Caribbean, oil-rich Trinidad & Tobago continues to extend and expand its exploration and extraction activities as researchers start to warn that reserves could start dwindling.

Guyana, in South America, has had many exploratory initiatives over the past two decades, including one by Chevron-Texaco, none yielding positive results.

But earlier this month English-speaking Guyana and neighboring Dutch-speaking Suriname – South American mainland-based Caribbean Community (Caricom) member-states that have had battles over rights to oil in waters shared by them – both announced new developments in their respective petroleum sectors.

Guyana announced that a Canadian company, CGX, had teamed up with Spanish oil giant Repsol, to form a consortium to begin exploring for oil this month in the Guyana-Surinam basin.CGX had launched a similar exploration exercise back in 2000, but was chased by sea pirates and bandits.

Surinam announced last week that it will soon start receiving oil from Venezuela as part of its PetroCaribe initiative, through which the oil-rich, Spanish-speaking South American and Caribbean state already delivers petroleum to most Caricom states with preferential prices and treatment.

Meanwhile, with world petroleum prices rising constantly and reserves dwindling in traditional source countries, Latin American and Caribbean nations have been increasing their searches for new sources of oil.

But they are also investing more time, energy and resources in similar searches for alternative sources of energy. In many cases, investment have been made in Caribbean territories in harnessing solar and wind energy, as well as hydroelectricity.

China recently signed a multi-billion-dollar deal to finance a major hydroelectricity project in Guyana.
In St. Lucia, a small US-based company, Qualibou, says it has found more potential power than it earlier thought at the island's active volcanic west coast Sulphur Springs and is now seeking capital to fund exploration. St. Lucia also earlier this year signed an agreement with a small Canada-based entity, Elementa Group and Island Green Energy of Sault Ste. Marie, to generate power from municipal waste.

* Editors Note: The Netherlands Antilles ceased to exist on 10th October 2010 and St. Eustatius has become a partially-integrated 'public entity' of the Kingdom of the Netherlands.

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