Hess Bid. I Don't Understand. Explanation Pls

How about jobs for the people that already work there now that know how to operate and maintain the plant?

Nothing is certain except death, taxes, and upgrades. The VI govt needs revenue more than it needs jobs, and the govt should seriously consider any offer that generates revenue for the territory.

80 jobs with a potential for 200 is a drop in the bucket. . .Way too many tax exemptions.

Everyone has to make up their own minds on this. I can't really provide any references to the documents about these two views.......and I rarely go much beyond them....but here are my own thoughts.

Tax exemptions. There is a 10% of profits PILOT with a minimum of $7 million/year. Plus there are actual fees for land and channel use and employment taxes. Hovensa would have had to stay in operation for years and years past its 2022 contractual endpoint for the GVI to make up that $7mm/yr PLUS $200+ million it is getting. Skip the $220 million Hess tax claim that goes away.

Jobs. 80-200 jobs is just the storage facility. If a first stage refinery for converting crude to naptha is built as is being discussed, the total of the two will be significant. Plus support vendors. No guarantees -- but it cuts the cost of exporting SA crude to foreign markets a lot. And if the SCRG facility can be leased or used for related projects -- that adds more.

As I said, just my opinion...As someone who has lived here off and on since 1959 and whose parents lived on STX before me, I feel that it creates needed activity and hope on STX beyond the $800 million in cash and non-cash equivalents. There were no significant bidders for a solo refinery besides the one the Legislature turned down. . .and nothing on the horizon. YMMV.

Carl

IMO, corporations are masters at avoiding taxes, so even if they didn't get the income tax exemptions, they'd figure out a way to whittle those taxes down to bare minimum. And, now that corporations can claim losses going back years, as Hovensa did, when they do pay taxes, those taxes could be off-set by losses in future years.

At least we know the MINIMUM of what we'll get based on what I've read, and it's a lot more than we're getting now.

80 jobs with a potential for 200 is a drop in the bucket. . .Way too many tax exemptions.

Everyone has to make up their own minds on this. I can't really provide any references to the documents about these two views.......and I rarely go much beyond them....but here are my own thoughts.

Tax exemptions. There is a 10% of profits PILOT with a minimum of $7 million/year. Plus there are actual fees for land and channel use and employment taxes. Hovensa would have had to stay in operation for years and years past its 2022 contractual endpoint for the GVI to make up that $7mm/yr PLUS $200+ million it is getting. Skip the $220 million Hess tax claim that goes away.

Jobs. 80-200 jobs is just the storage facility. If a first stage refinery for converting crude to naptha is built as is being discussed, the total of the two will be significant. Plus support vendors. No guarantees -- but it cuts the cost of exporting SA crude to foreign markets a lot. And if the SCRG facility can be leased or used for related projects -- that adds more.

As I said, just my opinion...As someone who has lived here off and on since 1959 and whose parents lived on STX before me, I feel that it creates needed activity and hope on STX beyond the $800 million in cash and non-cash equivalents. There were no significant bidders for a solo refinery besides the one the Legislature turned down. . .and nothing on the horizon. YMMV.

Carl

I'm from south-eastern PA (Philly area), where the loss to the refinery business was in dire straights. The only thing that helped salvage some of the losses was the ability to transport nearby sweet crude cheaply enough to keep a refinery open for Delta Airlines, and the abundance of shale and new fracking techniques in the state. Without, Sunoco would have shut down 3 refinery operations employing 1500-2000 people, and destroying many more peripheral jobs (sound familiar?). Sunoco was a major employer in the area. In fact, they donated the land my high school was built on, helped fund the school construction, a college scholarship program, summer camps, a vo-tech school, and more. (my high school was actually called Sun Valley, in their honor).

In spite of this, I have high school friends who were long time refinery employees, who had to uproot their lives and move to Texas and Louisiana a few short years before retirement to remain employed in the industry. And I have friends who left the industry altogether. The refinery situation is not unique to the USVI.

Since we aren't near a Delta hub, or have easy and cheap access to the crude jet fuel needs, and since there isn't an abundance of shale on the islands, we'd have to find another niche to be able to substantially and efficiently refine here. Holding out for a deal that would provide the number of jobs we had would have been a pipe dream. I think this is a great deal, even though it doesn't live up to our expectations. It at least holds the potential for a niche that could increase jobs eventually.

Thanks so much for translating the details into English for us, Carl.

(tu)

80 jobs with a potential for 200 is a drop in the bucket. . .Way too many tax exemptions.

Everyone has to make up their own minds on this. I can't really provide any references to the documents about these two views.......and I rarely go much beyond them....but here are my own thoughts.

Tax exemptions. There is a 10% of profits PILOT with a minimum of $7 million/year. Plus there are actual fees for land and channel use and employment taxes. Hovensa would have had to stay in operation for years and years past its 2022 contractual endpoint for the GVI to make up that $7mm/yr PLUS $200+ million it is getting. Skip the $220 million Hess tax claim that goes away.

Jobs. 80-200 jobs is just the storage facility. If a first stage refinery for converting crude to naptha is built as is being discussed, the total of the two will be significant. Plus support vendors. No guarantees -- but it cuts the cost of exporting SA crude to foreign markets a lot. And if the SCRG facility can be leased or used for related projects -- that adds more.

As I said, just my opinion...As someone who has lived here off and on since 1959 and whose parents lived on STX before me, I feel that it creates needed activity and hope on STX beyond the $800 million in cash and non-cash equivalents. There were no significant bidders for a solo refinery besides the one the Legislature turned down. . .and nothing on the horizon. YMMV.

Carl

Bottom line, you'll never satisfy everyone.
When Hovensa was in full swing, employing over two thousand people, dropping 80 million a year in taxes, donating to numerous island charities, supporting several schools, and dozens of other subcontractors, some people still moaned.

I received an email from someone asking what I thought was a good question -- so I'm posting my answer here: Why do I think the Government did not not like the Buckeye proposed deal as much (which the bankruptcy court approved as the "backup" bidder)? There is a transcript of the hearing before the bankruptcy court in which Joel Holt explains a number of the GVI's views -- it is too long to post and I can't seem to do a link to it....so if anyone wants it, just PM me.

The actual bids are not very far apart in amount -- so the real question, I suppose, is what other positive things does a bidder bring, and what negative baggage does the GVI have to worry about. In the positives, the present deal brings the Chinese -- which means a customer for 75% of present storage, good relations with the Venezuelan oil company (PDVSA -- which I would guess helps in settling the tax issue) and the possibility of a naptha-level refinery and other ventures. In the negative column is the fact that Buckeye's intentions were unclear which was hurt by the fact that soon after Buckeye bought the St. Lucia storage facility from Hess it started laying people off and last year called the cops on them when the workers were given notice they were fired at the gate when they showed up for work. That would seem to be a problem. (See article from local St. Lucia paper below.)

Again, the GVI had a well-respected industry consulting firm advising it about the choices and met and corresponded a lot with both parties. I suppose at some point you actually have to rely on the experts and then just do the deal . As my sainted grandpa used to say: "Pigs get fat, hogs get slaughtered." Or in lawyer-speak....don't let the perfect be the enemy of the good.

http://www.stlucianewsonline.com/job-losses-at-buckeye-st-lucia-terminal-limited/

Job losses at Buckeye St. Lucia Terminal
SNO Staff
July 24, 2014 [

About 45 employees of the Buckeye St. Lucia Terminal Limited were laid off today, July 24. Reports reaching St. Lucia News Online (SNO) indicates that the employees were told of the decision this morning when they showed up for work.

The disgruntled staff retaliated were forced to stay outside the building. Law enforcement officials – SSU officers – were called in to ensure law and order. The company said in a press release issued today that “as part of Buckeye St. Lucia Terminal Limited’s ongoing effort to complete the transition to Buckeye’s business and operating culture, the company is undergoing a re-organisation and restructuring.

As such, certain positions at the terminal will be modified, expanded, or eliminated.” The company further added, “These changes is to enhance the company’s ability to meet future challenges and is part of the company’s commitment to safety, environmental responsibility, regulatory compliance, and personal integrity. These changes will better position our terminal personnel to take advantage of future operating enhancements and business opportunities, as well as encourage individual employee growth.”

According to the company, it worked with the labour commissioner to ensure the necessary steps, as required by the Labour Code, were appropriately complied with. “As part of Buckeye St. Lucia’s dedication to the community, those employees impacted will receive an ex-gratia severance payment and the company is currently evaluating opportunities to assist impacted employees in transitioning to new employment,” the company added. – See more at: http://www.stlucianewsonline.com/job-losses-at-buckeye-st-lucia-terminal-limited/#sthash.4QIM3pDG.dpuf

Carl

VI CONSORTIUM TO LIVESTREAM SENATE HEARING AND SESSION ON ARCLIGHT OPERATING AGREEMENT

http://viconsortium.com/featured/vi-consortium-livestream-senate-hearing-session-arclight-operating-agreement/

I'm so embarrassed by our senators. I'm watching Terrance Nelson ask questions and he's like...."Wah I wan kno about dis here is" ..... Like, dawg, you're here talking about a 200+ dollar deal that affects the entire U.S Virgin Islands. You gotta at least try to speak clearly.

Any results yet?
Was there a vote?

I'm so embarrassed by our senators. I'm watching Terrance Nelson ask questions and he's like...."Wah I wan kno about dis here is" ..... Like, dawg, you're here talking about a 200+ dollar deal that affects the entire U.S Virgin Islands. You gotta at least try to speak clearly.

And then he implied the ArcLight people were lying. If I didn't live here this would be high comedy because I'd never believe that people that ignorant managed to be elected to anything. I don't know how some of them found their way out of the birth canal that are so incompetent.

(tu)
Amazing, eh?

The Consortium stated that another meeting is to take place with the Senate on STX on Monday. Does anyone know of a date set yet for the actual vote?

They're grandstanding, as is usual.
If y'all want them to pass this thing, y'all better get on the phone and start calling and pressuring them to get a move on it.

Janeinstx - hard to believe Sen. Nelson was a teacher/educator.
He's dumbing down and needs a refresher course in English and in manners.

I'm so embarrassed by our senators. I'm watching Terrance Nelson ask questions and he's like...."Wah I wan kno about dis here is" ..... Like, dawg, you're here talking about a 200+ dollar deal that affects the entire U.S Virgin Islands. You gotta at least try to speak clearly.

And then he implied the ArcLight people were lying. If I didn't live here this would be high comedy because I'd never believe that people that ignorant managed to be elected to anything.

Intentional result of the brain drain.

They're grandstanding, as is usual.
If y'all want them to pass this thing, y'all better get on the phone and start calling and pressuring them to get a move on it.

Janeinstx - hard to believe Sen. Nelson was a teacher/educator.
He's dumbing down and needs a refresher course in English and in manners.

l

It's an intimidation tactic. He knows how to speak Yankee very well.

It's BS, is what it is.

They're grandstanding, as is usual.
If y'all want them to pass this thing, y'all better get on the phone and start calling and pressuring them to get a move on it.

Janeinstx - hard to believe Sen. Nelson was a teacher/educator.
He's dumbing down and needs a refresher course in English and in manners.

He is an embarrassment to all voters of the VI but in particular to STX.

I believe the motion that was made and passed was to have a hearing on STX on Monday and then to have the vote on Tuesday which must, by law, take place in STT. Milan-Young is completely confuckled. She has no real understanding of anything that's going on. The questions she's asked has had me slamming my head on my desk. Gittens is also without a clue.

Oil storage is a huge issue right now, with such a massive glut of product available in the world, that's why gas prices are so low. This situation rarely continues for very long. Once this glut begins to dry up, a huge storage facility like the one on STX will be of far less value. For this, and all the reasons stated yesterday by Walker & Holt, we've got to move on this now.

(tu). I watched the whole darn thing yesterday and the brief session today. I'm still just blown away at how completely inept our representatives are and I pray that Millian-Young and Nelson are the minority.

Oil storage is a huge issue right now, with such a massive glut of product available in the world, that's why gas prices are so low. This situation rarely continues for very long. Once this glut begins to dry up, a huge storage facility like the one on STX will be of far less value. For this, and all the reasons stated yesterday by Walker & Holt, we've got to move on this now.

I didn't watch the whole thing but was somewhat impressed with Novelle Francis. His questions and delivery seemed on point and relevant. Having had personal interactions with him at the gas station, I think we need more people like him in the legislature.

If only he would stop charging the same gas prices as the rest of the Arab owned stations :S lol...

I don't think they are storing it to sell in the future at higher prices. China has no oil of their own, so they are very energy insecure. I think they are hoping to secure supplies to support their economy. Their demand is one of the reasons priced increased. Now that the U.S. has increased production, price is lower in order for foreign oil to stay competitive.

The push for renewables is another issue. As the technology improves and becomes cheaper, less demand for oil. Look at Denmark's efforts to reduce oil use.

There should be an IQ test requirement for Senators, constitution notwithstanding. THis is embarrassing. So sick of the fish fry politics.

You obviously haven't seen John Oliver's segment on U.S. state senators. The ones he showed make our senators look like geniuses! I was laughing so hard tears were rolling. Good anti USVI depressant for politics prescription.

Let me know if you need the link.