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Venezuela buys 49% stake in Dominican Republics refinery for US$131.5M
posted on: Nov 1 2009 12:53 by The Reporter. Viewed 825 times.
The Dominican Republics oil energy production industry entered a new chapter last week after a deal to sell nearly half of its oil refinery shares to Venezuela.
Venezuela's state-owned oil giant PDVSA has agreed to buy 49 per-cent of the Dominican Government-owned Oil Refinery (REFIDOMSA) for 131.5 million dollars, said finance minister, Vicente Bengoa.
"With a partner... like Venezuela, the refinery over the next years will considerably increase its production and sales," said Bengoa.
There is also a suggestion that the Dominican Republic could become an oil distribution center for the Caribbean and possibly Central America.
PDVSA official Amilcar Mata said both sides were still working out the final details of the plan which will be finalized at a ceremony in early November.
Until 2008, REFIDOMSA was half owned by Royal Dutch Shell, which sold its share to the government following a series of disagreements.
The Dominican Republic belongs to Petrocaribe, a regional initiative in which Venezuela offers discounted oil to friendly countries in the Caribbean, including Cuba.
Petrocaribe, which began in 2005, lets member countries buy oil at market value with only part of the payment needed up front. The remainder can be paid through a 25-year financing agreement on one percent annual interest.
It also allows nations to pay part of the cost with other products provided to Venezuela.
Venezuela has proven oil reserves of around 99 billion barrels and is the western hemisphere's largest oil exporter.
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