September 22, 2009 at 11:59 am #2996
Aruba Premier Expects Agreement With PetroChina Soon, ANP Says
By Bloomberg News
Sept. 21, 2009 (Bloomberg) — Aruban Prime Minister Nelson Oduber expects to be able to agree soon with PetroChina Co. about the sale of a Valero Energy Corp. refinery on the island, Dutch news agency ANP reported, citing the politician.
The refinery is placed well in the market given the $16 billion oil exploration agreement between China and Venezuela earlier this month, the Dutch-language agency cited Oduber as saying in a report dated Sept. 20. Talks are under way, he said, according to ANP. Aruba is in the southern Caribbean Sea, north of Venezuela.
San Antonio-based Valero said in July it was continuing talks with PetroChina over the sale of the 275,000 barrel-a-day facility that had been idled because of poor refining margins. The Chinese government has been encouraging its oil companies to buy overseas assets in the global economic slowdown and last week agreed to invest $16 billion in Venezuela to boost oil production.
This is a good time for PetroChina to be negotiating with Valero Energy because refining margin is at the bottom of the cycle following the global financial crisis, Gordon Kwan, head of regional energy research at Mirae Asset Securities Ltd. in Hong Kong, said in e-mailed comments today.
Mao Zefeng, the Hong Kong-based spokesman of PetroChina, Chinas biggest oil company, didnt pick up calls made to his office or mobile phone.
Valero Energy, the largest U.S. refiner, said on Sept. 18 it delayed until 2012 the expansion of a crude unit and coker at its refinery in St. Charles, Louisiana, because of poor refining margins. The company this year postponed capital projects totaling $3.4 billion at its North American refineries.
PetroChina, which had record refining profit in the first half, said on Aug. 28 it is considering buying more refineries as opportunities arise from the global crisis.
There is a good chance that PetroChina can land a very good deal given Valeros weakened negotiation leverage, Kwan said.
Valero originally sought $1.5 billion for the refinery while PetroChina continued to seek a lower price, Eric Brete, Arubas protocol officer, said on July 20. Valero bought the refinery in March 2004 for $365 million plus $100 million for related marine fuel operations and $250 million for working capital.
— Joost Akkermans in Hong Kong and Wang Ying in Beijing. Editors: Ang Bee Lin, Tan Hwee Ann.
To contact the Bloomberg News staff on this story: To contact the Bloomberg News staff on this s Ying Wang in Beijing at firstname.lastname@example.orgJoost Akkermans in Hong Kong at email@example.com
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