At a press conference held today on St. Thomas, Governor Kenneth Mapp sought to inform Virgin Islands residents on matters discussed at a meeting he and senior staff members conducted with the owners of HOVENSA Wednesday. The governor announced he has ordered Attorney General Soraya Diase-Coffelt to file suit against HOVENSA in the District Court of the Virgin Islands, after it was made clear by the company’s owners that their interests were only to serve themselves, with little consideration for the people of the territory.
According to the governor, Timothy Goodell, senior vice president of Hess Corp., made clear that the only way the V.I. Government would receive the $40 million owed it by HOVENSA is if HOVENSA is able to sell the refinery.
Mapp expressed dismay at Goodell’s stance.
“During the conversation, in response to our position, Mr. Timothy Goodell presented pretty much three options — one, that the plant be sold and the government enter into an operating agreement with it so that we could move forward. [However], if they were unable to sell, or if the government was unable to find an operating agreement, then they would move to close the plant by the end of February,” Mapp said.
He continued, “What seemed strange in Mr. Goodell’s comments to me was he indicated that if they were unable to sell the plant, for which proceeds of the sale would be used to pay the government its $40 million that were due on December 31st, 2014, they would use those sums to bring the refinery plant to a mothball close, and then seek to file bankruptcy.
“I was a bit dismayed by the comment and asked for some clarification, and it was restated. And so, in short, and in layman’s terms, what Mr. Goodell said was that, ‘I have your $40 million and if we are unable to get a buyer who will provide $40 million to pay for it, the $40 million that is due and owing to you, we would use that money to mothball the plant and shut it down.
“I’ve loaned folks money, so I know what that meant.”
Mapp said following Goodell’s comments, he instructed Attorney General Diase-Coffelt to move swiftly in filing suit against HOVENSA, and to issue a notice of breach of contract to HESS Oil and to PDVSA, HOVENSA’s owners.
“As a result of those comments, I had a meeting with the Attorney General and my senior staff, and I have directed the Attorney General of the Virgin Islands, Soraya Diase-Coffelt, to immediately issue a notice of breach of the Settlement Agreement to HESS Oil and to PDVSA, letting them know that the $40 million that were due and owing is a breach of the Settlement Arrangement, to advise the District Court of a breach of a Settlement Arrangement, and to file a motion for the reopening of the litigation on the contamination issues.
Mapp also directed the Attorney General to proceed with foreclosure action.
“As you may know, as a security instrument, on the sums due and owing to the government under the contamination issue only, HESS Oil put up its plant, all of its facilities, fixtures and property at Estate Hope,” Mapp explained. “To secure that note, I am instructing the Attorney General to foreclose on the note, and to take every legal action to seize the assets and security instruments contained at Estate Hope.”
Mapp said he has directed his staff to identify a law firm on the U.S. mainland with experience in dealing with issues relating to refinery and oil to lead the litigation, because, he says, “We also have the issues of the breach under the concession agreement, [and] as I indicated to Mr. Goodell and his team, the people of the Virgin Islands expect a full compliance with the obligations under our contract, and a complete cleanup of the south shore of St. Croix as mandated, and we will pursue those claims to the fullest extent of the law.”
On Dec. 19, the 30th Legislature voted to kill the Operating Agreement entered into between the de Jongh administration and Atlantic Basin Refining, which saw HOVENSA moving to shut down the oil refinery, as it said it would.
Mapp likened the situation between the Virgin Islands Government and HOVENSA as a relationship that had gone bad, and said the two parties were “on the verge of divorce.”
He also said that while the meeting with HOVENSA’s owners did not result in favorable outcomes, the representatives of HESS Oil and PDVSA were pleasant. He also made mention of the congenial relationship the territory and HOVENSA enjoyed mutually, especially in the years of Leon Hess, the founder of Hess Oil Corp.
Following Mr. Hess’s death, the refinery became a joint venture between Hess Oil Corporation and Petroleos de Venezuela, hence the name HOVENSA.
Tags: governor mapp, hovensa, mapp
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