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Thursday, September 29, 2022


In an effort to further stem financial losses before and after HOVENSA builds its coker unit, the company has hired one firm as its primary maintenance contractor.
The reorganization of HOVENSA’s maintenance operations with Jacobs Panamerican Corp., said HOVENSA Vice President Alex Moorhead, is not expected to impact maintenance contractors currently at the refinery.
"Rather than displacing any existing major contractor," Moorhead said in a statement Friday afternoon, "…Jacobs and Virgin Islands Industrial Maintenance Corp., the largest maintenance contractor at the refinery, are combining forces by forming a joint company to perform the duties of the refinery’s primary maintenance contractor."
Some maintenance tasks currently done by HOVENSA employees will be assigned to Jacobs. Moorhead added, though, that HOVENSA workers whose jobs will be eliminated in the reorganization will be offered similar positions with Jacobs or offered different jobs within HOVENSA.
HOVENSA employees who choose not to accept reassignment will have the option of severance benefits, Moorhead said.
He said the reorganization is being done to improve the company’s financial standing, specifically in the maintenance and reliability of petroleum processing equipment. Hiring Jacobs, with more than 50 years of experience in the industry, is a continuation of a reevaluation effort started when the St. Croix refinery was owned by Hess Oil of the Virgin Islands.
According to Moorhead, because HOVIC lost approximately $1.2 billion between 1991 and 1998, company officials began comparing the refinery with similar facilities, based on various economic performance factors.
While the refinery has made improvements, said HOVENSA president and chief operating officer Rene Sagebien, "there is still much more progress to be made for the refinery to place itself among the top U.S. refineries…"
Sagebien said without the coker, which will be able to process heavier-grade Venezuelan crude, HOVENSA is forced to process crude oil that is $2 to $4 per barrel more expensive than what the company’s competitors process.
The coker, however, will not be able to improve the refinery’s profitability if operating costs remain higher than competitors' because of maintenance costs and low mechanical reliability, Sagebien said. Hence the retention of Jacobs Panamerican.
"Jacobs will be responsible for managing the execution of all routine maintenance work and turnarounds," Sagebien said. "This change will become effective in early September."
Turnaround is the term used in the industry for the inspection and overhaul of a processing unit while it is temporarily shut down.
According to HOVENSA officials, Jacobs is currently performing maintenance at 51 refineries and petrochemical plants on the mainland and has performed major turnarounds at refineries in the Gulf states and California.

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