Tuesday, November 20, 2007

Venezuela, Cuba Preparing to Bring Cienfuegos Refinery Online

By Matthew Walter

Nov. 18 (Bloomberg) -- Venezuela and Cuba will start production at the Cienfuegos refinery on the Caribbean island nation ``in the coming days,'' Venezuelan President Hugo Chavez said.

The countries' state oil companies Petroleos de Venezuela SA and CUPET formed a joint venture to bring the refinery online after it sat dormant for 14 years, Chavez said today while attending a summit for the Organization of Petroleum Exporting Countries in Saudi Arabia, according to a government statement sent by e-mail.

During a first phase, Cienfuegos will process 65,000 barrels a day of crude oil into refined fuels, according to the statement. Cuba and Venezuela invested $236 million in the project. In the second phase, the countries plan to invest another $1.3 billion to increase output to 100,000 barrels a day.

The refinery, which was completed in 1991 with an installed capacity of about 76,000 barrels a day, has never operated because of its reliance on outdated technology from the former Soviet Union.

To contact the reporter on this story: Matthew Walter in Caracas at mwalter4@bloomberg.net

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