Hess exploring sale of oil terminal in St Lucia
Prime Minister Dr Kenny Anthony says the recent announcement by Hess Corporation of its intention to sell its crude oil and refined products storage and transhipment terminal in St Lucia, provides an opportunity to consider a broader rationalisation of the energy sector.
Speaking in parliament, Anthony said that he had been informed of the decision to sell the facility by Hess recently.
"If the sale does go through and one does not know, because in the discussion that followed the disclosure Hess Oil Corporation did indicate that if they do not get a sale in accordance with the terms they have every intention to remain here, so we shall see. But they have indicated that they prefer to focus on oil exploration instead of the buying and selling or distribution of fuel," he told legislators on Tuesday.
The integrated oil and gas company has since retained Goldman Sachs as financial adviser in connection with the potential sale.
In late January, New York-based Hess reported a loss for the fourth quarter, hurt mainly by a hefty charge related to the shutdown of its Hovensa refinery in St Croix, US Virgin Islands.
Hess said it explored all available options to keep the refinery operating, but severe financial losses resulted in the closure of the refinery. Hess noted that losses at the refinery have totalled US$1.3 billion in the past three years alone and were expected to continue.
According to the company, the losses were mainly due to weakness in demand for refined petroleum products as a result of the global economic slowdown and addition of new refining capacity in emerging markets. In addition, low natural gas prices in the US also impacted the refinery.
Hess said it had explored all available options to keep the refinery operating, but severe financial losses resulted in the closure of the refinery. Following the shutdown, the company said it plans to operate the complex as an oil-storage terminal.
Anthony said the time has come for St Lucia to consider a broader rationalisation of its energy needs and sector.
Meanwhile, parliament has given the green light to the government for a US$2.8 million loan from the International Development Association (IDA) for the establishment and operationalisation of the OECS Eastern Caribbean Energy Regulatory Authority project (ECERA).
"ECERA comes onboard just at the right time because, very clearly, as the experience of ECTEL shows, not only do we need an independent regulatory regime but also we need to be pointed in the right direction where the use of alternative energy is concerned," the PM said.
Anthony said St Lucia would not be required to repay the IDA loan not until 2046.