Oct. 27, 2006 — Happy Birthday Hovensa! Forty years ago Saturday, Hess Oil Virgin Islands Corp. (HOVIC) opened shop on St. Croix's south shore as a subsidiary of Hess Corp.
"When we first started out, we made almost all heating oil," Hovensa Vice President Alex Moorhead said.
According to Moorhead, the company at the time produced 45,000 barrels a day. Today, the company processes 495,000 barrels of crude oil a day, along with distillates like diesel fuel, jet fuel and kerosene.
The late Gov. Ralph Paiewonsky, who was in office when HOVIC began operations, outlines details about the deal with Hess Corp. owner Leon Hess in Paiewonsky's book, "Memoirs of a Governor."
He writes that Hess was referred to the Virgin Islands by Gov. Howard Hughes of New Jersey, where Hess then had its headquarters.
"Hughes had assured Hess that I would do everything possible to assist him," Paiewonsky wrote.
Paiewonsky identified land on St. Croix's south shore that was owned by Annie deChabert, known to one and all as "Miss Annie." Paiewonsky wrote that he sent Hess, in the company of his special assistant, Louis Schulterbrandt, to work out a deal.
"They found Miss Annie in the kitchen. She had just finished washing, and she was cooking while ironing her grandchildren's diapers. While they talked, she stopped ironing sometimes to stir the pot on the stove," Paiewonsky wrote.
Hess made her a "very substantial" offer, but Paiewonsky writes that all but one of her children weren't keen on selling because they considered the land their inheritance.
Paiewonsky writes that deChabert also wanted more money than Hess offered, and countered his offer with "If you can't pay me my price, you don't have to buy it. The land will remain there. Land don't rot."
As it turns out, Paiewonsky writes, she also had an offer from the Globe Oil Co., which also wanted to build a refinery on St. Croix, and she was holding out for the best offer.
Eventually Paiewonsky convinced her to sell. She initially sold 400 acres of deChabert property at estates Blessing and Hope, located adjacent to Harvey Alumina Inc. The Harvey Alumina land is now owned by St. Croix Renaissance Group. She later sold Hess more land.
Paiewonsky wrote that the crude oil to start operations at the plant came from Venezuela, but later oil came from Alaska via the Panama Canal.
In 1998 the V.I. company sold 50 percent of its interest to Petroleos de Venezuela S.A. to form a new company called Hovensa. The refinery sits on 1,500 acres of land, but Moorhead said Hovensa also owns another 500 adjacent acres that are vacant.
Hovensa is currently the territory's largest employer with 1,300 employees. Moorhead said various contractors have another 1,500 employees working, with that number growing occasionally for various projects.
Moorhead said that Hovensa has continued to upgrade its facility during the past 40 years and is currently finishing work on a $195 million low-sulfur gas plant to enable the company to meet U.S. Environmental Protection Agency mandates that low-sulfur fuel be flowing out of U.S. gas pumps by the end of the year.
Moorhead said work has also begun on a project to increase the facility's power capacity with a $60 million turbine. Another $90 million will go to upgrade the wastewater treatment facility.
According to Moorhead, these projects provide employment that would otherwise not exist along with worker benefits, including health insurance and pension plans. "And it generates tax revenue," he added.
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