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Cuban Oil Refinery Flooded, Oil Spills Into Bay

Cienfuegos Refinery

Cuba’s Cienfuegos oil refinery has sustained damage due to flooding after heavy rainfalls from subtropical depression Alberto, sending an unspecified amount of crude oil into the Cienfuegos Bay.

Barriers were set up to try to contain the oil spill, but not before 12,000 cubic meters of contaminated wastewater leaked into the bay. Over 20,000 people have been evacuated from Cuba in the wake of the storm.

The Cienfuegos refinery, located 150 miles southeast of Havana, is run by state-run Cupet, after taking over total control of the refinery which was previously co-owned by Venezuela’s PDVSA. PDVSA relinquished its 49% stake in the refinery mid-2017 due to alleged debts it owed to Cuba. The refinery had been idled for some time prior to the handoff, and was partially shut for a period of 120 days in 2016 for “maintenance”.

The refinery, configured to process Venezuelan crude, is capable of processing up to 65,000 barrels per day, but due to lapses in crude oil availability from Venezuela, the refinery operated well below capacity in 2017, processing just 8 million barrels for the year. The refinery has struggled to process the heavier grade of fuel oil Venezuela has been supplying.

Related: There’s No Getting Around Iranian Sanctions

While still an ally of troubled Venezuela, Cuba has shopped elsewhere for crude oil as PDVSA has failed to supply adequate quantities of the correct grade. In January, Reuters reported that Cuba was looking to Algeria to increase its oil supply.

Cuba has suffered by proxy due to Venezuela’s suffering, with Venezuela unable to carry out Cuba’s favorable oil swap deals it has enjoyed in the past. Still, PDVSA, as recently as two weeks ago, bought nearly $500 million worth of foreign crude oil and had it shipped directly to Cuba on “friendly credit terms”—often at a loss, according to company documents reviewed by Reuters.

No date for the refinery restart has been given.

By Julianne Geiger for Oilprice.com

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  • Sonia on May 30 2018 said:
    Refineries in Cuba, Mexico, and Venezuela all run at 30% capacity. The common denominator is all three refineries were nationalized without compensating the owner operators. Refineries require a high level of expertise to maintain. The same three countries nationalized sugar factories, cigar factories, electricity, water, corn flakes, and toilet paper with worse results.

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