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Costa Rica Eyes New Oil Refinery to Cut Fuel Costs

President Rodrigo Chaves has announced that there is substantial interest from multiple investors in establishing a oil refinery in Limón, with the aim of creating jobs and reducing fuel costs in Costa Rica.

Chaves emphasized that this initiative is among the “major projects” underway for the Caribbean province. He confirmed that Juan Manuel Quesada, the head of the Costa Rican Oil Refinery (Recope), is leading the discussions.

“Negotiations and discussions are underway. I’ve spoken with Juan Manuel Quesada to expedite certain legal matters. He won’t proceed with a refinery if $150 million of public funds result in nothing. Limonenses, don’t worry; there’s no cause for panic,” declared President Chaves.

According to Chaves, the financial responsibility for the project lies with the investors, and the State will not contribute financially, learning from past experiences such as the unsuccessful Soresco venture.

“Investors are seeking meetings to present their funding sources. Progress is being made, and while environmental studies are essential, we are committed to environmental protection. However, this is not a simple undertaking; it’s a complex, sizable, and sophisticated investment,” he emphasized.

In response to investor interest, Recope has already requested detailed technical and financial studies for evaluation, as stated by Quesada.

“We’ve asked interested parties to conduct a thorough, substantial technical and financial analysis. This will enable us to thoroughly evaluate the feasibility of this project,” he stated.

Despite the interest, the institutional hierarchy has assured that approval will only be granted when they are certain it is a beneficial plan for the country, ensuring benefits for all Costa Ricans.

Chaves clarified, on October 4, that the joint refinery proposal differs significantly from the Soresco project.

Soresco, originating in 2007 from an agreement between the governments of China and Costa Rica, involved the China National Petroleum Corporation (CNPC) and Recope in a joint subsidiary. However, due to identified flaws and project infeasibility, the agreement ended in international arbitration.

In 2019, the London Chamber of International Arbitration (LCIA) approved the dissolution of the joint venture. The arbitration mandated that Recope and CNPC take necessary actions to liquidate Soresco.

The arbitration award, officially communicated on October 28, 2019, set the process costs at $880,000, with Recope responsible for half of the amount.

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