Widely regarded as the most advanced refinery in Latin America, Reficar’s rejuvenation will shrink the growing trade deficit the country has been suffering from since the fall in oil prices. The refurbished Reficar has a refining capacity between 80,000 and 165,000bpd, and according to the US Energy Information Administration, Colombia consumes roughly 300,000 million barrels per day. The Minister of Finance, Mauricio Cardenas, is therefore confident that Reficar’s contribution could reduce the budget deficit by between $1 billion and $1.5 billion a year.
The quality of Reficar’s products and its location in Cartagena make the refinery a competitive addition to the oil and gas landscape. The refinery will also have a significant impact on propelling the local oil industry and the nation’s GDP. According to the Ecopetrol, the owner, the refinery could spur GDP annual growth by up to 0.6%. One of the technologies that has been implemented at Reficar is a fully automated scheme, involving several hundred kilometers of fiber optics, which will provide reliable and real time information to the managers of the plant, helping to optimize its performance.
One of its unique characteristics is the Naphtha Hydrotreating Unit. The unit removes sulfur from gasoline to deliver clean fuels. This unit is unique to just five refineries in the world. Another advantage is the plant’s flexibility to process about 150 different types of oil, which will bring a wide array of revenue streams to the refinery. Among those types of fuel, one of the most relevant will be the production of petroleum coke, a solid fuel used regularly by the cement and electricity industries. Reficar is forecast to generate 75 million tons of this fuel a month, a segment of what the plant will be manufacturing in total.
Reficar is being welcomed by the plastics industry, which is in need of development along the Colombian Caribbean coast. The General Manager of Reficar, Reyes Reynoso, pointed out in an interview with TBY that the modernization of the refinery is the first phase of consolidating the downstream sector in the Atlantic. “With the refinery in operation there will be potential for further industrialization within the petrochemical industry,” he added.
Nevertheless, despite all its advantages, the refinery has been in the spotlight after Ecopetrol incurred in a budget overrun of more than $4 billion, a 100% increase over the original costs. Costs skyrocketed and Colombians are now demanding public authorities take responsibility for the overrun.
The Comptroller General, a public spending watchdog, is considering investigating several Reficar executives as well as some of the foreign companies that were involved in the project. Inexperienced contractors, lack of planning, delays, strikes, and other unexpected factors plagued the modernization project from the start. However, “the project, despite the cost overruns, will be profitable. It will produce income to pay its debt and generate utilities,” said Reynoso during a press conference.
Reficar will be fully operational in 2016, coming at a crucial time for the Colombian economy, with the low commodity prices. Although it was designed during a high oil price environment, “The current pricing for crude oil provides an even better opportunity than originally planned,” claimed Reynoso during his interview with TBY, who added that it is time for the industry to “renew business strategies.” “This is a well-managed company, and my perspective on Colombia’s oil industry in general is positive,” he said.