17 August 2012

Aruba refinery purchase by China finalized

 ORANJESTAD — The principle agreement between the American oil company Valero and the Chinese state-owned company Petrochina on the purchase of the refinery on Aruba is finalized.
Petrochina now awaits approval from Beijing. Premier Mike Eman (AVP) stated the aforementioned after conversations with executives from Valero late last week.
The premier described the principle agreement between Valero and Petrochina, which is not the same as the MOU between Petrochina and Aruba, as ‘phase one’ of the selling process. The second phase is the approval of the agreement and the final decision to take over the refinery from Valero. This approval could take a while, said Minister of Finance, Utilities, Communication & Energy, Mike de Meza (AVP).
“I understand this. Generally speaking, it takes over one year to sell a large refinery as the one on Aruba. It’s a time-consuming process.” Nevertheless, both Eman and De Meza hope to receive a positive answer from Beijing within several weeks.
The ministers think it’s a good sign that in a letter to Valero, Petrochina requested to keep the workers employed until the refinery has been taken over. Premier Eman also requested Valero once again to keep the personnel employed. “After all, it regards almost 600 persons who often have a special function and won’t easily find similar employment elsewhere.” Moreover, the premier emphasized that these employees should stay on when the refinery is taken over.
Economic impact

Early June rating firm Standard & Poor’s (S&P) stated not to lower the credit rating for Aruba despite the closing of the refinery. Nevertheless, S&P departed from the refinery reopening very soon. The rating firm assumes that the government will take measures to prevent ‘fiscal decline’ if it took more than several months to reopen the refinery. 
The Central Bank of Aruba (CBA) anticipates an economic decline (-4.2 percent) in 2012 if the refinery doesn’t reopen this year. If the refinery reopens in September, the bank expects a marginal growth of 0.1 percent. An economic growth of 1.6 percent is expected