Saturday, September 05, 2009

Comptroller's office approves China - Recope Oil contract

(Inside Costa Rica) - Costa Rica's Comptroller's Office (Costa Rica's legal watchdog) on Thursday cleared a billion-dollar contract the government signed with China to jointly build an oil refinery after it was held up in legal wrangling for months.

The Comptroller's Office reversed its own earlier ruling in March, when it said an agreement signed in 2008 was invalid. The contract allows Costa Rica's state oil refinery (RECOPE) to form a joint venture with the China National Petroleum Corporation (CNPC).

The government of President Oscar Arias, which severed diplomatic ties with Taiwan in 2007 to open ties with China, signed an agreement for the joint venture during the visit of Chinese President Hu Jintao.

The Arias administration insisted on the legality of the agreement, and reacted with joy on Thursday when the office cleared the contract.

"This is extraordinary news for the country," said the president's brother and Presidency minister, Rodrigo Arias.

The agreement includes the creation of a joint venture bi-national company "in charge of developing and putting in operation the project to broaden the Moin refinery in the province of Limon, to increase its production to 60,000 barrels a day," the Comptroller's Office said in a statement.

The new Moin refinery is expected to dramatically increase the country's current refining capacity.

The refinery is expected to generate between 1,000 and 1,500 direct jobs, and some 5,000 more jobs indirectly in the province of Limon, according to the government.

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