The CITGO Aruba refinery at San Nicolas — a 235,000 barrel-per-day facility that spent a century under successive owners including Standard Oil, Exxon, Coastal Corporation, Valero Energy, and CITGO — will never process crude oil again. In November 2025, the governments of Aruba and the Netherlands jointly announced the permanent closure and dismantling of the former Lago refinery site, backed by €50 million in Dutch transition funding. The decision ended a decade-long search for a new operator and closed one of the Caribbean’s longest-running industrial stories.
From Standard Oil to Exxon: The Lago Refinery Era
The San Nicolas facility began life in 1924 as the Lago Oil and Transport Company — a transshipment operation founded by Pan American Petroleum and Transport Company to move crude from Venezuela’s Lake Maracaibo to US refineries. Standard Oil of Indiana acquired the site in 1928 and added a small refinery, before selling to Standard Oil of New Jersey — the Exxon predecessor — shortly after. Under Standard Oil of New Jersey, the Lago refinery expanded dramatically during the Second World War, becoming one of the largest refineries in the world and a critical producer of aviation gasoline for Allied forces. Its strategic importance was underlined on 16 February 1942, when a German U-boat attacked the facility in the opening hours of Germany’s Caribbean offensive.
Exxon operated the Lago refinery for four decades after the war. By 1985, the plant was ageing, economics had deteriorated, and Exxon made the decision to shut down and begin dismantling operations. The closure removed thousands of jobs from the Aruban economy. The island government moved quickly to find a replacement operator, acquiring the site and selling it to Coastal Corporation in 1986. Coastal invested in the facility — adding a delayed coker unit and upgrading process equipment — and returned it to operation as a conventional crude refinery serving Caribbean and Atlantic Basin markets.
Valero Acquires, Then Walks Away
As Coastal Corporation ran into financial difficulties in the early 2000s, it sold the Aruba refinery to Valero Energy in 2004. Valero — by then the largest independent refiner in the United States — added the 235,000 b/d Caribbean facility to a portfolio that stretched from the US Gulf Coast to the UK. The refinery operated under Valero for several years but chronic margin pressure in the island refining environment — high operating costs, logistics disadvantages, and limited feedstock flexibility — made the asset increasingly difficult to justify. Valero shut the refinery down in 2012 and ultimately walked away, leaving the Aruban government and the state-owned Refineria di Aruba NV to find a new path forward.
The site sat idle for four years. The Aruban government approached multiple parties seeking an operator willing to invest in a restart. The eventual taker was CITGO Petroleum Corporation — the US-based refining arm of Venezuelan state oil company PDVSA — which signed a 25-year agreement with Aruba in June 2016 to refurbish and reopen the facility as an upgrader for extra-heavy Venezuelan crude from the Orinoco oil belt. The project was valued at approximately $1.1 billion.
The CITGO Chapter: Sanctions, PDVSA, and the End of the Project
The CITGO Aruba refinery project never progressed beyond preliminary refurbishment work. US sanctions on PDVSA — first imposed in early 2019 and expanded in subsequent rounds — cut off CITGO’s access to financing and left the project without the capital to proceed. During the period between 2016 and 2019, CITGO used the San Nicolas site primarily as a transshipment terminal, receiving Venezuelan crude cargoes contaminated with water, allowing them to settle in storage tanks, and reloading for onward shipment to US and Asian markets. The $1.1 billion upgrader project made no meaningful progress.
By October 2019, CITGO and the Aruban government signed a memorandum of understanding to hand the refinery and terminal assets back to state control. The formal transfer to Refineria di Aruba NV was completed in February 2020, with CITGO acknowledging it had no funds to meet its obligations to employees, contractors, or vendors — debts the Aruban government was left to manage. The termination of the CITGO contract did not affect separate supply agreements under which CITGO continued to provide refined product and jet fuel to the island’s retail network and Queen Beatrix International Airport.
The Search for a New Operator — and Its Conclusion
Following the CITGO exit, the Aruban government issued two rounds of expressions of interest for the San Nicolas site — one seeking a refinery operator and one seeking parties interested in repurposing the land for alternative industries. The government received 29 proposals for the refining track and 25 for the repurposing track. Negotiations with interested parties stalled repeatedly. A US consortium called Quanten publicly proposed restoring the 235,000 b/d refinery capacity with an option to expand to 350,000 b/d; the proposal went nowhere. Eagle LNG signed a separate supply contract for a small-scale LNG regasification terminal at the San Nicolas port — a project that was still unresolved as of late 2024.
On 8 November 2025, Aruba’s Prime Minister Mike Eman and Dutch Prime Minister Dick Schoof announced the definitive end of the oil chapter at San Nicolas. The former Lago refinery site will be completely dismantled and remediated, with the Dutch government providing €50 million from a special energy transition fund alongside technical assistance for the decommissioning process. Plans for the site include green industrial zones, clean energy infrastructure, maritime innovation facilities, and circular economy industries. After almost a century of oil processing on Aruba, no further crude refining will take place at San Nicolas.
CITGO Aruba Refinery: Ownership Timeline
| Period | Owner / Operator | Status |
|---|---|---|
| 1924–1928 | Pan American Petroleum / Standard Oil of Indiana | Transshipment port; small refinery added |
| 1928–1985 | Standard Oil of New Jersey (Exxon) | Full refinery operation; WWII expansion; 235,000 b/d peak |
| 1986–2004 | Coastal Corporation | Restart and upgrade; delayed coker added |
| 2004–2012 | Valero Energy | Operation then closure due to poor economics |
| 2016–2020 | CITGO Petroleum (PDVSA subsidiary) | 25-year restart deal; $1.1bn project; abandoned after US sanctions on PDVSA |
| 2020–2025 | Refineria di Aruba NV (Aruban government) | Idle; operator search; 54 proposals received; no restart |
| November 2025 | — | Permanent closure and dismantling announced; €50m Dutch transition fund |
The San Nicolas story has a parallel in other Caribbean refinery closures of the same era. Limetree Bay on St Croix — another former Hovensa refinery that attracted successive restart attempts before finally converting to terminal operations — followed a similar pattern of idling, failed restarts, and eventual repurposing. The broader dead brand track across North American midstream infrastructure — from NuStar Energy absorbed into Sunoco, to Magellan Midstream acquired by ONEOK — reflects the same structural consolidation dynamic playing out at different scales and in different asset classes. The full landscape of downstream oil and gas companies that emerged from this consolidation period shows how dramatically the refining and logistics map has been redrawn since 2012.
What happened to the CITGO Aruba refinery?
CITGO signed a 25-year deal in 2016 to restart the 235,000 b/d San Nicolas refinery as a Venezuelan crude upgrader, but US sanctions on CITGO’s parent company PDVSA cut off financing and the $1.1 billion project was abandoned. CITGO handed the facility back to the Aruban government in 2020. In November 2025, Aruba and the Netherlands jointly announced the permanent closure and dismantling of the site, backed by €50 million in Dutch transition funding.
Who owned the Aruba refinery before CITGO?
The San Nicolas facility passed through several owners across a century of operation. Standard Oil of New Jersey (the Exxon predecessor) operated the Lago refinery from 1928 until closure in 1985. Coastal Corporation acquired and restarted it in 1986, adding a delayed coker unit. Coastal sold to Valero Energy in 2004, which operated the refinery until shutting it down in 2012 due to poor economics. CITGO then signed its ill-fated 25-year restart agreement in 2016.
What was the CITGO Aruba refinery’s capacity?
The San Nicolas refinery had a rated capacity of 235,000 barrels per day. At its peak under Exxon’s Lago operation during the Second World War, it was one of the largest refineries in the world, employing around 7,000 people from 56 countries. Under CITGO’s 2016 agreement, the project planned to restore that capacity with an option to expand to 350,000 b/d — a plan that was never executed.
Why did CITGO abandon the Aruba refinery project?
US sanctions on PDVSA — CITGO’s Venezuelan state oil company parent — imposed from early 2019 onwards cut off access to credit and financing, leaving the $1.1 billion refinery restart project without capital to proceed. CITGO acknowledged it had no funds to meet its obligations to employees, contractors, or vendors. The formal handback to the Aruban government was completed in February 2020 following an October 2019 memorandum of understanding.
Will the Aruba refinery ever reopen?
No. In November 2025, the governments of Aruba and the Netherlands made a definitive joint announcement that the former Lago refinery at San Nicolas will be permanently closed and dismantled. The Dutch government committed €50 million from an energy transition fund for environmental remediation and decommissioning. The site is planned for redevelopment as green industrial zones, clean energy infrastructure, and circular economy facilities.