Latest: Valero Refinery Aruba To Shut Down
Topic: Energy
Valero Corp. outperformed competition 2004-2008 – blue line in above image
Today Valero Refinery Aruba shocked many people locally with the announcement of the closure of the refining operations in St. Nicolas for at least three months, starting July 2009.
If you are familiar with Valero Aruba this shouldn’t come as a surprise. Valero has been seeking a buyer for over a year and thus far failed miserably. There were interested parties but no agreement could be reached. Refinery officials left the doors open for all options.
The refinery has a long history which started in the 1920s. For most of its history it was owned by Exxon (today Exxon-Mobil). After assessing the installations and market, Exxon decided to shut it down in the 80s. It was then decided by the government in turn to dismantle the refinery completely, until the next government reached an agreement with Coastal Corporation to purchase the old installations. After rebuilding and restarting a fraction of the old installations, the refinery was then sold in the 2000s by El Paso Energy Group – which since acquired Coastal Corporation – to Valero Energy Corporation, America’s largest refiner.
The installations continued to be in poor condition despite moderate investments by Valero. The company clearly stated in their mission statement – available online – that it was planning to invest in the facilities in order to “guarantee profitability and continuity”. Apparently neither goals were accomplished.
Today’s announcement marks the end of an era once more. I don’t believe the refinery is going to open again in three months, at least not as Valero. As big as the refinery was, they only employed – by own account – a staff of a meager 700 people and never paid profit taxes due to a tax holiday they’ve always enjoyed.
It’s a given that refinery officials – echoed by “experts” and “analysts” – are going to blame the macro-economic situation, drop in oil prices and other typical justifications during these times.
June 11th, 2009 Read more » valero
Blog Archive » Prime Minister: Valero isn’t coming back » arubalife.net
July 23rd, 2009 at 7:12 pm
[...] Aruba. Meanwhile Valero Corp. officials have mostly kept quiet and all options open. Last month I wrote just the same thing, that I don’t believe the refinery is reopening as [...]