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News from the Netherlands Antilles
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Valero Aruba plant shut indefinitely, workers fired
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| Published on Thursday, August 27, 2009 | Email To Friend Print Version
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By Barbara Powell and Jessica Resnick-Ault
DALLAS, USA (Bloomberg) -- Valero Energy Corp. said its Aruba refinery, the third-largest in the Caribbean, will be closed indefinitely and “nearly all” the remaining contract workers fired. The refinery stopped production July 16.
Valero, the largest US refiner, notified workers Wednesday that the shutdown will continue because the economic situation has not improved, Bill Day, a company spokesman, said in an e- mail. Valero has sought to sell the plant.
The refinery has more than 1,000 contract workers and is one of the largest employers on the island of 106,000, according to Leo Maduro, policy adviser to the Aruba Chamber of Commerce and Industry. None of the refinery’s 780 Valero employees have been laid off, Day said.
“Most people say a shutdown of the refinery would mean a 13 percent loss of our GDP, and that’s a lot,” Maduro said. Valero workers represent approximately 3.9 percent of the island’s private sector workforce of 45,000.
Valero stopped production at the refinery, its third- largest, after operating it at a loss in the second quarter, saying it would re-evaluate economic conditions in two to three months. Day said Wednesday that distillate margins and, more importantly for Aruba, the light-heavy crude oil differential, have not improved since the second quarter.
“The changes you would have needed to see to reopen Aruba have not come yet,” Bill Klesse, Valero chief executive officer, said in an interview Tuesday. Heavy, sour grades of crude oil that the Aruba refinery can process would need to be more deeply discounted to make the refinery profitable, he said.
The discount of Mexico’s Maya crude, a heavy grade, to West Texas Intermediate, narrowed to $4.11 yesterday from $6.21 June 30 and $10.22 on Aug. 26, 2008, according to data compiled by Bloomberg.
Valero said on July 28 it would have to consider cutting employees and reducing contract workers if the plant moved to a “cold shutdown” status.
Day said on Aug. 24 that Valero would maintain the plant in a “hot mothball status” with power available to the production units so it could be restarted “fairly quickly.”
The distillates, intermediate refinery feedstocks and blending components it produces are sold in US, South American and European markets.
The Aruba refinery can process 275,000 barrels of crude oil a day. The largest refinery in the Caribbean is the Hovensa plant in the Virgin Islands, followed by Isla in the Netherlands Antilles owned by Petroleos de Venezuela SA.
Valero, based in San Antonio, owns 16 refineries from Quebec to Aruba. | | | | Reads : 898 | | | |
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