(Reuters) - The government of Curacao said it has scrapped a preliminary agreement with Guangdong Zhenrong Energy to operate the island’s aging Isla refinery, saying the Chinese firm misrepresented itself and was unable to take on such a large endeavor.
The two sides signed a deal in 2016 to invest some $10 billion in upgrading the facility.
Curacao’s government said Guangdong Zhenrong does not have the muscle to invest in the refinery and lacks “unconditional support” from the Chinese government.
“GZE turned out to be the contrary of what it said at the time of signing the MoU (memorandum of understanding),” Curacao said on its government website in a statement dated Sunday.
“Curacao is looking for a viable alternative to guarantee the future of the refinery,” it added.
Guangdong Zhenrong was not immediately available for comment.
Venezuelan state oil company PDVSA [PDVSA.UL] has for decades operated the refinery, which opened in 1918, under a lease agreement. But cash-poor PDVSA has been reluctant to invest some $1.5 billion that Curacao authorities requested several years ago to modernize the 335,000 barrel-per-day facility.
Reporting by Sailu Urribarri; Writing by Alexandra Ulmer; Editing by Jeffrey Benkoe