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lily1025
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January 20, 2015 9:50 pm  

since i am not a lawyer just a concerned vi citizen....one question keeps popping up in my mind......if the teritory is involved with litagation with hovensa,as it seems is mapp's plan,does that mean it can't be sold??


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Rowdy802
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January 20, 2015 9:58 pm  

Oh goody... I am going to get the pop corn ready for this one... 😀


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CruzanIron
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January 21, 2015 12:14 am  

There are 13 people that can answer that question. I suggest that you ask them. They know more than anyone else in the VI.


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Pdmargie
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January 21, 2015 11:09 am  

Where is Mapps Thursday announcent to his Wednesday meeting with Hovensa and Hess??? Must be an island time thing :S


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vicanuck
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January 21, 2015 11:15 am  

I'll let MissJustice handle this...she knows everything.


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ms411
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January 21, 2015 11:36 am  

Where is Mapps Thursday announcent to his Wednesday meeting with Hovensa and Hess??? Must be an island time thing :S

His Thursday announcement was posted Friday. The negotiation didn't go well so he's suing.


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IslandHops
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January 21, 2015 12:57 pm  

Great question, and I'll give my OPINION on what is happening. But I need to step back in time a bit.

I think there was a probable deal earlier last year to sell the refinery to the Chinese, but when they started initial discussions with some of the government cronies they were so disgusted with the process that they wisely decided there was no way to do business with the status quo and buggered off. This left Hovensa and DeJongh in a tight spot with time running out for the 4 extension agreement.

In the mean time ABR, made up of some smart folks, worked out how they could rehab and operate the refinery in a profitable manner. ABR got in the process with Lazard (contracted by Hovensa/VI Government find and vet buyers) to do the deal and went through all the upfront diligence. This culminated in DeJongh and the ex-AG negotiating with ABR what was probably the best deal under the circumstances. Now not everyone is a fan of DeJongh (as you'll read), however I think this the deal was about the best we could hope for. (Note there is a link to a very interesting report about the ABR deal under another thread: Hovensa Myths and Facts, that I suggest anyone interested read).

So the deal goes to the senate. And Hovensa reminds everyone that without the deal going through they are effectively out of business and will shut down, as published 9 months earlier in the Hess annual report. Of course some senators jump up and down about this 'threat' which is grandstanding BS, as this was no surprise to anyone following from the sidelines. And this is where a competitor (Monarch) starts making all kinds of noise about how they were shut out of the sales process and could do so much better for the VI than the ABR deal. I think Monarch might have made approaches directly to Malone to get him on board so he could influence the senate. And low and behold the gang of 15 give DeJohng, ABR, and Hovensa the finger 'in the best interests of the VI' and the ABR deal is killed off.

Before year end there are rumors that when Mapp comes to power a new Malone/Monarch deal will be announced and we will all be saved. But in the background all Monarch wanted to do was kill the ABR deal so they didn't have the competition. Where is Monarch now? Disappeared in a cloud of bullshit dust laughing their collective assets off.

So Mapp comes to power, and even before meeting with Hovensa he makes negative statements predisposed to an aggressive stance. When they meet Hovensa is so fed up with the ongoing bullshit they say, sorry guys you screwed the pooch, we're broke, you didn't agree to the best possible outcome when you had the chance and we're fed up.

Mapp gets all pissy and pulls the lawyer card. From this point on we all resign to ending up wasting more money on law firms with a rusting hulk on the south shore for years to come. Which is what is likely to happen unless there is a miracle before the EPA operating permit expires at the end of Feb.

Mapp seems to be a very vindictive individual you wouldn't want to cross, especially now he is in power. Prime example is what went on with the AG's office, and how many non-Mapp supporters are being removed from their government positions. Politics down here is kind of like Dr. Seuss Sneeches on the Beaches. There are those with stars on their bellies and those without.

Now some other information I think (in my OPINION) is accurate.

First the 40mil the government is owed. Yes this is truly owed by Hovensa to the VI government as part of a settlement for environmental damage to the water table. What is not published is that 99+% of the damage was re-mediated and there is no longer any environmental issue. Hovensa/ABR would have paid the government the 40mil if the ABR deal had been approved. As the deal was not agreed too, through no real fault of Hovensa then where this really left everything under the 4th agreement is a bit of a mystery. I'm no lawyer and don't know where this will head.

Now the 280+ mill that the VI Government owes Hovensa(Hess/PDVSA). This came about thanks to our republican business friendly federal government who changed the tax rules to allow big business to recoup tax losses from prior year's tax profits. It's part of the federal tax code. There is no escaping it. The VI Government will need to cough this up sooner or later.

This really puts the screws on Mapp. He is 40mill short on expected revenue and now facing another 280+ short. Eventually this will have to be settled and probably the 40mill negotiated somehow from the tax refund burden, while releasing the assets back to Hovensa.

Mapps financial strategy was to 'rework' the current bonds to further leverage our future tax income and create immediate monies to fund the government. Now the tax refund to Hovensa will need to be included somehow in the equation.

Lastly the BS around the 700mill EPA 'fine'. There is no fine and no monies owed. The EPA said that to continue to operate the refinery as is, significant changes were needed to curb environmental issues. The estimate for this was over 700mil. This was one of the last nails in the coffin as related to the original shutdown of refining operations. Under ABR's approach significant re-tooling would be required anyway, costing at least as much if not way more, and as they would be processing light crude instead of the heavy Venezuelan crap (which the Chinese are now taking by the tanker load) much of the environmental issues leading to the EPA ruling would be irrelevant.

All of this is my OPINION. Barring a hail mary, and given Mapp's and the Senate's we don't need you "Closed for Business" approach, we will be stuck with the rusting sculpture on our south shore for years to come. I could be totally wrong about Mapp, but I think that we may be in for a difficult 4 (or 8) years ahead. I for one will be very interested in the State of the Territory address next week.

Or is there an act.2 in the works where Monarch reappears like the ghost in a Shakespearean play once the VI Government seize the refinery - Yea right.


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CruzanIron
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January 21, 2015 1:26 pm  

IslandHops,

You have hit the nail on the head with every point. It should be required reading for anyone wanting to know what happened.

My OPINION is that Monarch was a paid front by another major player in the industry to disrupt the deal. They never had the money that they claim to have had, and as you say - they've now disappeared with no comment.


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JohnnyU
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January 21, 2015 1:29 pm  

+1

Great post


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ms411
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January 21, 2015 1:44 pm  

To answer OP's question, my understanding is that it can still be sold, but government has to approve any operating agreements with a buyer.


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IslandHops
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January 21, 2015 1:51 pm  

One correction to my previous post - The amount of tax refund Hess/PDVSA are claiming is 236 mill.


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vicanuck
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January 21, 2015 2:28 pm  

An excellent synopsis of the situation.

Great work IslandHops!

Now...where's MissJustice's briefing on this?


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ms411
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January 21, 2015 2:30 pm  

Now that Mapp has been elected and deJongh is history, Miss Justice's "work" is done.


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Rowdy802
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January 21, 2015 4:21 pm  

Now that Mapp has been elected and deJongh is history, Miss Justice's "work" is done.

aka "Miss Fair" at the VI Consortium.. go figure those handles...


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CruzanIron
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January 21, 2015 4:33 pm  

To answer OP's question, my understanding is that it can still be sold, but government has to approve any operating agreements with a buyer.

They would have to negotiate the lease terms for the submerged lands.

But in reality, the government does not have to approve the sale of a private business like this, but a buyer would not want to buy unless they had an agreement in place first.


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CruzanIron
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January 21, 2015 4:39 pm  

Now that Mapp has been elected and deJongh is history, Miss Justice's "work" is done.

aka "Miss Fair" at the VI Consortium.. go figure those handles...

I think 'miss fair' is one of the VIC writers. Minimal 'nice' comments to evry story with no follow up. They've banned most posters and in order to show advertisers that they are viable, they respond or have paid responders to bolster their declining readerrship.


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Rowdy802
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January 21, 2015 4:52 pm  

Well, I got lucky one day, and the same thing this person posted here was posted at the "Consortium". Also, some other comments were extremely similar... But I do get your comment...

As for the topic, Mapp decided to put a chip on his shoulder to show face. He may end up with a log instead. Most the senators should give a dang good explanation other than all the whining they showed about the deal. They wanted HOVENSA to pay, even when ABR said they would cover what is owed. They are fixated in making HOVENSA pay.

The refinery may still be sold even after it closes its operations entirely. The problem is there no buyers lining up. The existing crude oil market does not benefit the situation. Many refineries are cutting back. That doesn't mean some deaf-dumb & blind buyer may fall in love with the site (which is a very good one) and see it as a long term investment.

IMHO, if ABR and Monarch are really that interested, then they should come back and fight for it. Easier said than done because of the VI operations permit.


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janeinstx
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January 21, 2015 10:14 pm  

They better do it soon. Hovensa's EPA permits expire soon. When that happens it's doubtful they will ever be reissued.


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Anonny-mouse
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January 21, 2015 11:24 pm  

Now...where's MissJustice's briefing on this?

Could it be that between getting appointed AG and the immediately resigning, she has been too busy to post here...???


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ms411
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January 21, 2015 11:33 pm  

Now...where's MissJustice's briefing on this?

Could it be that between getting appointed AG and the immediately resigning, she has been too busy to post here...???

And sending letters from DOJ "staff" singing praises of resigned AG. 😉

Oh, if we only had truthful facts!


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Anonny-mouse
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January 22, 2015 7:21 am  

And sending letters from DOJ "staff" singing praises of resigned AG. 😉

Oh, if we only had truthful facts!

Who needs facts when it's so much more fun to just make stuff up! ; )


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IslandHops
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January 22, 2015 11:08 am  

Now that Mapp has been elected and deJongh is history, Miss Justice's "work" is done.

After the inauguration of Mapp, M.J. was on such a high they had to put her on a methadone program.


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LiquidFluoride
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January 22, 2015 2:44 pm  

They better do it soon. Hovensa's EPA permits expire soon. When that happens it's doubtful they will ever be reissued.

is that your opinion?

what is it based on ?


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StxStx
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January 22, 2015 2:59 pm  

They better do it soon. Hovensa's EPA permits expire soon. When that happens it's doubtful they will ever be reissued.

is that your opinion?

what is it based on ?

my thoughts exactly. why do they post these random baseless assertions without any sort of evidence ?

just reckless ......


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janeinstx
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January 22, 2015 3:48 pm  

HOV Title V permit expires the end of February. If allowed to expire with no application for renewal ( and I see no evidence of a renewal application on the EPA web site) the new owners would be starting from scratch. Delegation of Title V responsibility for issuance goes to DPNR per Title 70 (or 71, certain conditions being met it not met.

Conditions being whaT they are I see it as very unlikely that a new entity would be able to secure operating permit (Title V) .

Some opinion. Some fact.


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