Venezuela’s PDVSA unit in the United States, Citgo Petroleum, and Aruba recently signed an agreement to reactivate a 235,000-barrel-per-day refinery on the Caribbean island, an investment designed to help process the South American’s oil producer’s extra heavy crude.
The Aruban government reported last month that the agreement involves a 25-year lease to allow Citgo to operate the refinery, after investments amounting to at least $1 billion.
Even though PDVSA’s financial condition is weak amid low crude prices, its subsidiary Citgo enjoyed some relief last year due to higher refining margins, which would allow it to direct a portion of its profit to Aruba.