The HOVENSA refinery employs 1,200 workers with another 950 contract employees at the site. About 100 people is expected to be retained to operate the terminal. Photo: Caribbean Journal

Fmr. Minister for Communications and works, Hon. Julian Fraser RA

“There is absolutely no doubt in my mind that we should be very concerned. This was a concern ever since the USVI Governor announced the dismissal of a thousand workers. This will impact greatly, whether directly or indirectly on the Virgin Islands.”

According to Hon. Fraser, there are many Virgin Islanders who are employed in the two US islands or may have relatives working there and their layoff could mean a strain on the pockets of Virgin Islanders at home, who may be depended upon to assist during the period of employment.

Hon. Fraser also envisages that Virgin Islanders, who are laid off, may also want to return home and this may add to the unemployment rate.

Another issue that Hon. Fraser pointed out was that the BVI Electricity Corporation (BVIEC) gets its fuel from HOVENSA in St. Croix and now having to purchase fuel from somewhere else eventually may mean having to pay more for shipment and thus affecting the fuel surcharges, which is already of concern for consumers.

Efforts to contact the Minister for Communications and Works Hon. Mark Vanterpool for a comment were futile.

After efforts made by the government to avoid major layoffs, USVI Gov. John deJongh Jr. announced in December that by the end of January, approximately 1,000 government employees will be dismissed. The governor’s announcement came after the Senate rejected a variety of financial proposals that would help make up the $66-67 million deficit that the government is now facing.

On January 18, 2012, the HOVENSA oil refinery in St Croix, US Virgin Islands, announced it will be shut down by mid-February. Following the shutdown, the complex will operate as an oil storage terminal.

The refinery, which is one of the 10 largest in the world and the largest in the Caribbean, is a joint venture between the Hess Corporation and Petroleos de Venezuela SA.

Hess cited weakness in demand for petroleum products due to the global economic slowdown and the addition of new refining capacity in emerging markets as factors leading to the shutdown. It also said the low price of natural gas in the United States had place HOVENSA at a “competitive disadvantage.”

The company said it had explored other options to keep the refinery operating, but financial losses “left it with no other choice.” Losses at the 350,000 barrel-a-day site totaled $1.3 billion in the past three years, the company said in a statement.

HOVENSA was the third-largest U.S. refinery before cutting capacity last year, according to the Energy Department in Washington. The Hovensa refinery employs 1,200 workers with another 950 contract employees at the site. About 100 people is expected to be retained to operate the terminal.