PDVSA: Ecuadorian refinery still 'on track'

Eric Watkins
Oil Diplomacy Editor

LOS ANGELES, Dec. 2 -- Venezuela's state-owned Petroleos de Venezuela SA (PDVSA), contradicting earlier remarks by a senior company official, has no plans to change its schedule for the construction of a refinery in Ecuador.

The statement, issued by the Ecuadorian oil and mines ministry, followed a meeting between Ecuadorian oil minister Derlis Palacios and Venezuelan energy and oil minister Rafael Ramirez who confirmed his country's commitment to execute the project.

Work on the joint-stock Refineria del Pacifico, held 51% by Ecuador's state-owned Petroecuador and 49% by PDVSA, is scheduled to start in 2010 and operations are expected to begin by 2013.

The Ecuadorian statement followed media reports concerning a revision of the projected investments of PDVSA abroad due to the fall of international oil prices. The media reports specifically mentioned the refinery project in Ecuador and another one Nicaragua.

Elogio Del Pino, a PDVSA vice-president, told the Venezuelan newspaper El Nacional in comments published on Nov. 29 that PDVSA would reevaluate funding for some international projects, while its investment in the domestic oil industry would remain unchanged.

"The idea is to maintain investment in the country, because our idea is to have between 300,000 and 400,000 barrels (of oil) per day of potential—so that when the rebound in oil prices comes…we can then open up that production," Del Pino told El Nacional.

"International investments like the refineries in Ecuador and Nicaragua are under evaluation," Del Pino said, adding that, "We're asking to look for financing" to help pay for the 300,000 b/d refinery in Ecuador and the 150,000 b/d facility in Nicaragua.

Nicaraguan officials have issued no comment concerning Del Pino's remarks about the planned facility in their country. But his statement about the need for additional financing was in line with earlier remarks by officials involved in the Ecuadorian project.

In September, reports said that PDVSA and Petroecuador would jointly finance just under one-third of the estimated $6-10 billion cost of the Ecuadorian refinery, expecting that the outstanding amount would be financed by other countries.

Carlos Albuja, head of Petroecuador unit Petroindustrial, said the two state firms would "finance 30% of the cost. Countries such as England and China, among others, are interested in financing the remainder."

Since then, a memorandum of understanding has been forged between Iran and Ecuador for the revamp and modernization of Ecuador's refineries. Under the MOU, a refinery will be constructed, to be cofinanced by Iran, Ecuador, and Venezuela (OGJ Online, Sept. 22, 2008).

Contact Eric Watkins at hippalus@yahoo.com.

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