Wednesday, May 5, 2010

Venezuela Set To Buy 49% Stake In Dominican Republic Refinery

CARACAS (Dow Jones)--Venezuela President Hugo Chavez said he will finalize a deal Wednesday for state oil company Petroleos de Venezuela, or PDVSA, to buy a 49% stake in the Dominican Republic's state-owned oil refinery, Refidomsa.

Chavez was set to travel to the Dominican Republic Tuesday night, with plans to sign the refinery deal Wednesday alongside Dominican President Leonel Fernandez, according to a statement from the Venezuelan government.

"This is very important, not just for the Dominican Republic but also for Venezuela, because it puts us in the heart of the Caribbean," Chavez said, according to the statement. "It will allow us to ship our petroleum for refining and distribution, not just within the Dominican market, but also throughout the Caribbean's central market."

The refinery, which began operation in 1973, manages the supply of about half of the Dominican Republic's fuel needs, the Venezuelan government statement said.

Venezuela has been talking about purchasing the minority stake in the 34,000 barrel-a-day refinery for nearly a year. The value of the 49% stake has been reported at more than $130 million, though Venezuelan officials say it will paid by shaving off some of the debt the Dominican Republic owes Venezuela from oil sales.

Royal Dutch Shell PLC (RDSA, RDSB.LN) had been a 50% stakeholder in the refinery until late 2008, when it sold its stake for about $100 million.

Chavez said that buying a stake in the refinery will also allow Venezuela logistically to provide fuel to Haiti as the earthquake-ravaged country rebuilds itself.

-By Dan Molinski, Dow Jones Newswires; 58-414-120-5738;

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