Costa Rica insists China oil contract is valid

Costa Rica has said that a contract with China to jointly build an oil refinery was valid, despite objections from the government's own legal watchdog.

The government's decision "is clear and definitive: we will tell the Comptroller's Office that we insist on ratifying the contract," said the minister of the presidency, Rodrigo Arias on Wednesday.

"The urgency of this enormous investment for this country is well known," Arias said.

The national Comptroller's Office in March said that an agreement signed in late 2008 for the Costa Rican Oil Refinery (RECOPE) to form a joint venture with the China National Petroleum Corporation (CNPC) was not valid.

The Comptroller's Office -- an independent bureau that monitors government actions to make sure they are within the law -- said the Costa Rican-Chinese joint venture would violate the RECOPE's legal monopoly on oil refining and distribution.

The project can proceed only if legislators changed the law, the Office said.

The one billion-plus dollar refinery was to be built in the town of Moin, on the Caribbean coast, and would dramatically increase the country's current refining capacity.

Arias said that the Comptroller's Office probably did not weigh all the elements when they took their decision.

The refinery would generate between 1,000 and 1,500 direct jobs, and some 5,000 more jobs indirectly in the Caribbean province of Limon, Arias said.

"This investment will save the country between 200 and 300 million dollars on its oil bill, now that the price of oil is low, and if it goes up the size of the saving will be a lot higher," Arias added.

"The country cannot waste an investment like this simply because there is a doubt over whether it is legally presented in a proper fashion or not," Arias added.

He said that a team of lawyers would study the contract in order to make a new presentation to the Comptroller's Office.