The Petroleum Corporation of Jamaica (PCJ) has almost completed the sale of 49 per cent of the government owned Petrojam oil refinery to Venezuela's state oil company, Petroleos de Venezuela S.A. (PDVSA).

The negotiating team of both entities, PCJ and PDVSA, are currently engaged in the final stages of discussions to iron out the details of their imminent business partnership. The PCJ and PDVSA agreed to a sale price of US$130 million for the Petrojam refinery in Kingston and the product storage terminal in Montego Bay. The sale includes the physical plant, storage facility and business operations.

"This concludes over a year of meetings, held in Jamaica and Venezuela, which began with the signing of the Letter of Intent in February 2005, by both companies to review a proposal from Petrojam for the Upgrade of the Refinery", said Dr Ruth Potopsingh, PCJ group managing director.

PDVSA will pay US$63.7 million for 49 per cent share ownership in the refinery and the business operations. A critical component in the Sale Agreement is the commitment to jointly upgrade the refinery to ensure a modern facility, with improved technology for production efficiencies that would guarantee a long life span and a viable operation.
Projects for the upgrade will include expansion of the refining throughput capacity to 50,000 barrels a day, up from 36,000 barrels; modernisation of the processing technology to produce higher volumes of high end, clean products and low sulphur diesel from lower cost, heavy crude oil, and to improve the conversion process to manufacture the full range of clean products, eliminating low margin Heavy Fuel Oil (HFO) from the product mix produced by the refinery.

Petrojam now supplies approximately 85% of the non bauxite fuel needs of Jamaica. About 60% of this demand is produced at the refinery, while the rest is supplied from imports, mainly high end products, including unleaded gasolene, LPG and low sulphur diesel, from Trinidad and Tobago.

Both PDVSA and PCJ jointly agreed to engage the international firm, Purvin and Gertz Inc. (PGI), an energy and petroleum consultancy, to value the refinery, the 125,000 barrels storage terminal in Montego Bay and the business operations.

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