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Business Week: Dominican gov’t seeks to buy out Shell

By RAMON ALMANZAR
SANTO DOMINGO, Dominican Republic

The Dominican Republic is seeking to acquire full control of an oil refinery jointly owned with Royal Dutch Shell PLC in a bid to stabilize domestic fuel prices.

President Leonel Fernandez said Thursday that the treasury minister has been authorized to begin negotiations for the company’s 50 percent stake in the Refidomsa refinery, which produces 30,000 barrels of fuel per day, just under a fifth of the Caribbean country’s daily consumption.

In a broadcast speech largely devoted to a new energy conservation program, Fernandez said the joint-ownership arrangement has prevented the Dominican Republic from expanding the refinery — which would let it import its full fuel quota under Petrocaribe, a Venezuelan program that provides oil to Caribbean nations under preferential terms.

“We are not suggesting that Shell has been a bad partner,” the president said.

Shell said earlier this year it was conducting a strategic review of its stake in Refidomsa, an indication that it was willing to sell. Company officials did not immediately respond Friday to a request for comment.

Refidomsa, on the outskirts of the Dominican capital, has been in operation since 1973. The government and Shell each hold four seats on the board of directors, though the company runs operations.

The Dominican Republic can import up to 50,000 barrels per day under Petrocaribe, which allows participating countries to finance a portion of their costs long-term at low interest rates. But the country has been able to bring in only about 35,000 a day, the government says.

Gas prices approaching $5 per gallon have sparked protests in the Caribbean country, which imports all its fuel.

Fernandez also said the government would try to increase fuel conservation by reducing traffic congestion in the capital and converting buses and taxis to run on natural gas.

http://www.businessweek.com/ap/financialnews/D8SUSSPO0.htm

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