hovensa

boy if that happens, the island would be in a quick downward spiral for sure.
how is the job hunt going

I heard the the older part was being mothballed. They just did a bunch of maintenance on the cat cracker.

My son said that his friend here at Country Day told him that they're laying off 500 people this month. Of course, that's coming from a 6th grade boy, so take it with a grain of salt.

Looks like we have enough gasoline on the East Coast to last a while. After Hovensa announced "unplanned" shut down yesterday the price spiked. This article says shut down won't be a problem, and the price has fallen.

http://www.bloomberg.com/news/2010-12-10/gasoline-falls-on-speculation-supplies-adequate-for-demand.html

Shut down one of the World's largest refineries that almost exclusively handles Venezuelan crude, that has to be handled in a particular way?

Uh, I don't think so.

Why do you think they've laid off people, fired the president, etc.? Hovensa is clearly in trouble and loosing a lot of money from published reports. Just look at what the credit agencies have said and how they've rated Hovensa - not good. Personally, I don't know if we're looking at a reduction or a shut-down but neither is good for the local economy.

They always lay of the contracted labor, like Sun and wyatt around november/december and then rehire them in January/Feburary. It's always been like this. We just have so few of the contracted labor companies left.

Haven't heard anything yet about mass lay off of actual Hovensa workers.

With losses approaching one BILLION dollars over the last two years the HOVENSA as we know it will more than likely come to an end. I hope something can be found to fill this void as some of the obvious consequences, WAPA bills will at least double if not triple, the gasoline prices will be same as that on St. John or more, property values will plummet 35-50%, the government will have to reduce it size by 75% just to stay solvent, many business will have to close causing an avalanche of additional problems on top of this one. Yes when HOVENSA closes it will be a sad day for St. Croix and the US Virgin Islands. It would be great if anyone would buy HOVENSA but due to the permitting process and hoops a company is made to go thru that’s doubtful even if heavily discounted. I find it strange none in the local government is even concerned. Perhaps in twenty or thirty years some temporary employment will come back to help clean up one of the USA’s largest superfund sites but that’s a different topic.

With losses approaching one BILLION dollars over the last two years the HOVENSA as we know it will more than likely come to an end. I hope something can be found to fill this void as some of the obvious consequences, WAPA bills will at least double if not triple, the gasoline prices will be same as that on St. John or more, property values will plummet 35-50%, the government will have to reduce it size by 75% just to stay solvent, many business will have to close causing an avalanche of additional problems on top of this one. Yes when HOVENSA closes it will be a sad day for St. Croix and the US Virgin Islands. It would be great if anyone would buy HOVENSA but due to the permitting process and hoops a company is made to go thru that’s doubtful even if heavily discounted. I find it strange none in the local government is even concerned. Perhaps in twenty or thirty years some temporary employment will come back to help clean up one of the USA’s largest superfund sites but that’s a different topic.

"When" Hovensa closes? How do you come up with your opinion?

Some thoughts:

Hess is a hugely wealthy company, over $29 bil in assets, mostly in proven reserves (meaning they can weather the storm).
Hess' main business is not refining, but exploration/reserves.
Hess only owns half of Hovensa. The other half is Venezuela, which needs a place to distill its oil into gasoline, and itself is hugely wealthy (Vz just found a massive natural gas reserve off its coast).
All refineries have struggled the last two years.
Construction of new refineries elsewhere is prohibitively expensive in this climate, especially given the scale of the Hovensa operation.
Closing a refinery the size of Hovensa would create massive oil price gyrations and be politically untenable. Already the price went up on the global market and exchanges yesterday just because they took the gasoline section down for repairs.
If push comes to shove, all they need to do is renegotiate the Venezuelan crude deal, or sell their interest to another company.

In many ways, Hovensa's capacity is just too big and important to the hemisphere's economy to fail, let alone St. Croix's.

The word I hear from independent contractors working at the refinery is a little less than optimistic.

Hovensa refines Venezuelan sour crude. Heavy crude is more costly to refine than sweet crude and maintenance costs are higher as well. Chavez has long sought to break Venezuela's dependence on the US markets and China has been busy.

http://www.bloomberg.com/news/2010-04-18/venezuela-gets-20-billion-loan-from-china-forms-oil-venture-chavez-says.html

"China, the world’s second-biggest consumer of oil, will lend Venezuela $20 billion and form a venture to pump crude from the Orinoco Belt, President Hugo Chavez said, vowing to meet the Asian country’s energy needs."

I found this interesting...

recent Wikileaks article on Chavez and PDVSA

just the word i got from people high up who work at hovensa, that for the first time they are reallyyyyyyyyyy worried. it is a serious problem.

wonder who gets to turn the lights off if it does close???

They always lay of the contracted labor, like Sun and wyatt around november/december and then rehire them in January/Feburary. It's always been like this. We just have so few of the contracted labor companies left.

Haven't heard anything yet about mass lay off of actual Hovensa workers.

This is not true, they are laying off actual employees now, not just releasing contractor's. I have friends who have to leave their housing on very short notice due to layoffs.

From what I hear the outlook isn't great but I also don't think things like Hovensa shut down overnight...we may be in the midst of a gradual decline that we never recover from though.

Sean

When ST Croix becomes a State and no longer a" FREE PORT STATUS" maybe just maybe the plant would move? close? How long do you think that will take?:-o

i agree with stiphy. something is in the works for sure.

the tringle (or is it tinkle) down effect for the island would be horrible.

Dixie--it's the trickle down effect

whoops!!!

Oh Good Grief! And here I am moving down in 3 weeks for a civil service job. The only thing I know about the oil refinery is that is huge and has been there for a long time. Where do 500 plus laid-off people find work on an island? Cut gov't personnel by 75% and I'll probably be out the door the day after I arrive. Triple the price of power? Really? And I thought Hydro Quebec was bad!!

Good Grief sometimes this board gets tiresome in everyone wanting to prove you wrong. Sean what did I say that was untrue? I said I had not HEARD of any recent layoffs of real hovensa employees I didn't say there were not layoffs.

But I will tell you there was a huge lay off last year or the being of this year. And middle management is always the first to go. A large part of the population in the free housing are not really permanent hovensa employees but contracted middle management.

The worst thing they did was let Chavez in. I still don't understand that one. But I seriously doubt he could pull out as easily as what you guys think. And what Neil said was true hovensa is a player in the world market and manufacturers about 70 percent of jet fuel right now for the US, last I heard. I haven't looked it up to see if that's still correct.

But basically this thread just sounds like we are all screaming the sky is falling. We have no facts and just rumors. The island past time at its finest.

When ST Croix becomes a State and no longer a" FREE PORT STATUS" maybe just maybe the plant would move? close? How long do you think that will take?:-o

There are plenty of refineries in the states.

--------

Oil is a boom-bust business.

The islands would do well to wean themselves off the refinery-tourism teet, and start producing basic commodities like its own food, and and durable goods. Unfortunately, such vision requires visionary leadership.

guess its just a wait and see....

Neil,
Hess moved it's refinery out of New Jersey partially for tax advantages in the early 60's. Oil Companies are not interested in
Refineries. Oh and you're wrong about enough refineries, the Demand is Greater than the supply and the price reflects it. If Hovensa starts a layoff and the prices go up, do you think that could be price motivated.*-)

Neil is correct! Anything we do to sustain ourselves is going to help. I moved here 3 years ago planning to work for Hovensa, and quickly realized that the organization is financially weak and indecisive. I have since started my own business in high efficiency air conditioning systems and have more work than I can handle.

The bottom line is that our future lies with each of us focusing on our dreams and desires, not in a company or a government. All is well. Really. Hovensa will eventually close. No company lasts forever. But life in St. Croix will continue. The abundance of our Universe is not dependent on the crack spread of oil or the efficiency of a government.

Well said Mr SHDOUG....unfortunately most people do not recognize their own usefullness and personal wealth as part of their dreams and desires. Glad that the AC business is going well...so how about fixing that remote problem that I have!!!!