Above: the HOVENSA refinery
By the Caribbean Journal staff
United States Virgin Islands Governor John de Jongh has submitted the new agreement with the HOVENSA refinery to the legislature for approval.
The agreement, which is the fourth Amendment Agreement between the two sides, will cover the 14-month sales process of what was once the largest oil refinery in the Caribbean until it shuttered in 2012.
“The 30th Legislature’s approval of the submitted agreement will allow the process of getting a new owner to begin, which will ensure that the facility is once again a place of job creation and generation of tax revenues for the territory,” de Jongh said in a release.
HOVENSA is owned by Hess Oil Virgin Islands Corporation and Venezuela’s PDVSA.
During the sales process period, the facility will temporarily operate as an oil storage terminal.
“Our negotiations with the refinery’s Owners have been long and difficult, but seeing if we can get the refinery reopened has been important to me and many in our community,” he said. “For the last year and half, we have experienced what a closed refinery means to our economy and that continuing scenario is something we can ill afford given the prominence of its location and, quite frankly, its potential value locally and to an industry that is going through a transformation that we can be a part of.”
The sales process is not to exceed 14 months after the ratification of the agreement by the USVI Senate.
As part of the agreement, HOVENSA would have to invest a minimum of $500,000 every year in technical and scholarship programmes to Virgin Islanders as long as it owned the facility.
The USVI would reduce HOVENSA’s obligations for payment in lieu of property taxes to $7 million each year as long as the facility operates as a storage terminal, among other provisions.
“We cannot afford to have 2,000 acres of a rusting metal façade sitting idle in the middle of St Croix providing neither jobs nor economic activity necessary for our well-being,” the governor said. “This is not the original course that HOVENSA and its owners wanted, but it is the best course for the long term interest of our community: we allow a company to exit that no longer wants to be here, we explore the preferred alternatives, and then we negotiate a new agreement with a new owner under terms and conditions that are in the best interest of our people and our territory.”