Venezuela acquires stake in Dominican Republic refinery

The Dominican Republic, struggling to pay off oil debts to Venezuela, agreed to transfer a 49 % stake in its 34,000-bpd, state-owned Refineria Dominicana de Petroleo (Refidomsa) to Venezuela's state oil company Petroleos de Venezuela.
The Dominican Republic has owned 100 % of the refinery since last December, when it bought the 50 % stake formerly held by Royal Dutch Shell for $ 110 mm. Reports say the Shell sale was part of the firm's strategy to exit all of its businesses in the Caribbean in order to focus on other regions of the world.

The sale of the 50 % stake in the refinery, which began operating in the mid-1970s, coincided with a visit to the Dominican Republic by Venezuelan officials, led by PdVSA commercial director Ramon Herrera.
The Venezuelans were in the Dominican Republic for talks on how the island nation could use goods and services to pay off $ 1 bn in debt to Venezuela for oil supplied under the PetroCaribe initiative. The Dominican Republic is one of 18 Central American and Caribbean nations that participate in the PetroCaribe energy initiative under which Venezuela offers its crude and refined products to buyers on favourable terms.

The Herrera-led delegation discussed matters with Dominican Finance Minister Vicente Bengoa. The Dominican Republic currently receives 33,000 bpd of Venezuelan oil under the PetroCaribe initiative but wants an increase to 50,000 bpd.
In June of this year, Bengoa announced a plan for the repayment if its $ 1 bn oil debt, saying the bill would be "partially" settled with black beans and tourist packages -- among other goods and services. Bengoa said PdVSA would acquire its 49 % share of the refinery by foregoing 60 % of the payment it normally receives from the Dominican Republic for PetroCaribe oil over a 3-month period-about $ 130 mm.

Venezuela's Energy and Oil Minister Rafael Ramirez said his country's plan is eventually to integrate the Dominican refinery into a network of eight refineries in various countries that are beingupgraded or built by Venezuela as part of its PetroCaribe initiative.