Recope Rejects Bids to Double Capacity
by Rod Hughes
Costa Rica’s oil refinery, Recope, has discarded a plan that would double capacity, deeming the project “unprofitable.” The project would have raised the current daily output from 20,000 barrels to 40,000. Still, something will have to be done to fill the country’s appetite of just under 50,000 barrels per day and the projected demand increase of 10% yearly.
Recope had hoped to see a bid of around $165 million for the project but the most viable it received was for $425 million. So the refinery is shelving results of the bidding and is seeking other ways of filling demand without prohibitive price increases to its consumers. “Recope isn’t going to launch this country on a project that’s not feasible,” said William Ulate, the refinery’s International Projects and Commerce manager.
Ulate added that Recope is not discarding the possibility of enlarging the plant to process 60,000 barrels of crude daily, but is simply “reformulating” it. Such a capacity would not only allow flexibility but allow it more favorable rates in buying on the international market. Possibly, China’s National Petroleum Corporation (CNPC) can help by running a feasiblity study under an agreement it signed with Recope.
CNPC could offer financing and even do the construction job on the refinery. But, according to Ulate, nothing is committed with the oriental company and if RECOPE ecope sees a better deal, it will opt to take it.