Nah, more refining capacity would mean less profit for them. This is all about driving up the crack spread for the company. They also don't want to sell it to anyone else that might upgrade it as that would hurt them as well.wow....haven't been on the forum for awhile and what an awful thing to come back to....
Hopefully, if they keep it in a state of viability it can be re-opened quickly if things change.
Maybe they should consider changing what they do and start to fully convert the process to usable gasoline...???
At present the refinery is only capable of refining heavy sour crude which is refined into heavy petroleum products.
Upgrading the plant to refine light sweet crude in order to produce gasoline is huge $$$$.
Valero to shutter Aruba refinery
By Vicki Vaughan
Updated 08:32 p.m., Monday, March 19, 2012
Valero Energy Corp. said Monday it would indefinitely suspend production at its Aruba refinery at month's end because the plant isn't profitable.
The San Antonio-based refiner cited weak margins and “unfavorable refinery economics” that are expected to continue as reasons for the shutdown.
For at least two years, Valero has said it was considering “strategic alternatives” for the 235,000-barrel-a-day refinery that could include a sale.
“We're still going to be seeking alternatives for the refinery,” Valero spokesman Bill Day said Monday. “We were trying to keep it running because in our view, it was more attractive as an operating refinery rather than a shutdown refinery. But it's getting to the point that we can't continue losing nearly half a million dollars a day.”
The planned closure will make the second time in about 2˝ years that Valero has shuttered the Caribbean plant. It closed the refinery in July 2009, saying it was losing millions each month, and restarted it in late 2010, when economic conditions improved and when the company reached a tax settlement with Aruba's government.
The plant employs 780, and “for now, all will remain on the payroll,” Day said.
The refinery will be placed in “cold shutdown” mode that would allow it to be restarted.
Valero's stock closed at $27.95 a share Monday on the news, down 4 cents, in New York Stock Exchange trading.
Valero may use the shuttered plant as a terminal and storage operation. The site has the infrastructure to allow ships to unload crude oil or other products that Valero could store or have delivered to the Gulf Coast, South America or even Europe, Day said.
Valero's Aruba plant doesn't make finished gasoline for the U.S. market but intermediate feedstocks, and “the market for that has been very depressed,” Day said.
Also, Aruba processes heavy and sour crude that sells for less of a discount now compared with light, sweet crude oil, another advantage that has disappeared.
Finally, the plant's operating costs have risen because it doesn't have access to low-cost natural gas for electricity to power its units. It requires more costly fuel oil, and “that's a cost disadvantage,” Day said. email@example.com
It is interesting to read speculation on why or why not a company alters it's operations. If I've learned anything from 17 years working on Philadelphia's industrial waterfront, much of it in and around oil refineries, as well as staying in close touch with this industry since my departure from that environment, it is this: the public has many misconceptions about the petroleum business. Hence, the rumors and he said/she said and I heard and they say and on and on and on, swirl about.
The fact is, oil is a business subject to market, regulatory, and unforeseen forces. Because energy is required for everything and anything, the world is affected by this primary fuel of action, including its vagaries, misjudgments, and sudden upheavals. Do these events cause trouble for everyone. Yes, they do. And that's the way of the world. Every ounce of crude contains millions of years of sunshine (I'm writing a piece about this right now). Until someone a thousand times smarter than me comes up with a better way to propel humanity, oil is here to stay (as is coal and nat gas), which means the world must come to terms with the realities of energy recovery and production, including the uncomfortable parts, such as the profit required to motivate people to do some very difficult and dangerous things. Spend a month on an oil rig in the middle of the ocean, or with a crew drilling a hole in central nowhere (think Siberia) or inside a refinery with the temperature, pressure, and chemistry required to form, reform, and crack long chain molecules and it will be a real eye-opener. It doesn't happen for free nor is it easy, which means be careful when you accuse another of wanting a premium to accomplish this task.
If it was a cakewalk, there would be a line at the door instead of a shortage of the qualified and capable.
Aruba's Novelist in Residence (sometimes)
I was at Baby Beach yesterday and spoke to some locals who were hoping for it to stay open This is a real problem for the people on the Island
Contract workers at Valero without work within 2 weeks
Friday, 23 March 2012 11:30
SAN NICOLAS — Oil refinery Valero will be letting part of the contract workers go per April 5th. The workers involved were informed this morning. Another part of the contract workers will remain employed.Valero-spokesperson Bill Day confirmed before the Amigoe this morning that contract workers will be leaving the company. He explains that the current situation is comparable to the closing down of Valero in 2009, when only most of the permanent workers remained employed. “We will not proceed to dismantle and as per the government’s request, the permanent personnel will remain employed.” Day does not wish to comment on how many contract workers are employed at Valero. “We do not announce that kind of information.” Nevertheless, he states the number of contract workers had already decreased considerably since the announced production cut back last year.
The remaining personnel will stay on for the time being to make a new start possible. According to Day, contrary to previous reports it will not be a swift new start. “When we make this new start it will be comparable to the new start made in 2010.” At that time, the new start of the oil refinery had taken several months. For that matter, the production never returned to the level from before the closing down in 2009.
One of the options for the new start of the refinery is collaboration with or a purchase by PetroChina. For that reason Minister of Finance Mike de Meza (AVP), Utilities, Communication & Energy met with senior executives of PetroChina last Monday. Upon his return, the Minister said he ‘a good feeling’ about the meetings with representatives from the Chinese state-owned company PetroChina. “They indicated they were highly interested in further discussions on a possible agreement”, said the Minister.
In 2009 and 2010, the Chinese state-owned company had also shown interest in Valero. However, for various reasons, this was never concretized. One of the reasons was a difference of opinion on the sales tax (bbo) on export and the number of foreign workers PetroChina wished to employ. Last week, the Chinese oil giant informed the government that the company was still looking for a strategic partner and that the refinery on Aruba is top priority because of the nearby continent Venezuela. De Meza left for the United States on Monday evening for meetings with the director International Affairs of PetroChina, Jiang Jiemin and several other staff members. Jiemin stated that PetroChina will seriously view the possibilities. “First we will study and discuss all documents, information and proposals, and subsequently revert to such as quickly as possible”, said the senior executive of PetroChina.
When we visited Aruba for the first time in 1983, a refinery employee gave us a lift from Eagle Beach to Palm Beach. He was very kind. Sorry to hear about this...
I wonder what effect this will have on the island, with 600 people out of work... Aruba is such a nice place would hate to see it fall on harder times...
Aruba signs MOU with PetroChina
On Thursday morning, the Aruban government and PetroChina representatives signed a Memorandum of Understanding (MOU) at the government offices in Oranjestad. Prime Minister Mike Eman explained that PetroChina agrees in the MOU that the company is seriously considering the purchase of the refinery on Aruba from Valero and will be negotiating their establishment on the island during the coming weeks.
The government of Aruba has been trying to find a suitable partner or a company willing to purchase the refinery after Valero tried, but decided the refinery was no longer a desirable venture for their company. Since December, when Valero told the government they were planning on closing their operations on the island, Aruba's minister of energy and the prime minister have been in talks with representatives of different companies and their governments, including Colombia, Brazil and Venezuela for a possible partnership or purchase. The refinery has been idle for a few weeks now. Valero representatives were also on-island for meetings with the government and PetroChina.
I read your words and wonder what has happened to us as a world. true, the loss of the refinery will mean a loss of jobs and that is not a pretty thought at all, yet I wonder just how sad we (as occupants of this planet) should be at the closing of an oil refinery. I give this thought and my emotions are simple,
Sad - Yes
Not - Yes
Confused - Totally
There really should be another solution to these smoking monsters.
As an after thought, I love my island and write continuously about it, yet while I love it - I cannot find one thing I have written about the refinery. Perhaps I am shortsighted on this. Who knows.
THERE ARE PLACES TO SEE - STORIES TO TELL
IMAGES TO HARNESS - AND MORE STORIES ON caribbean.tv
we as a planet should (my opinion) be doing happy dances when refineries close.
that being said, the refinery in aruba holds much history, provides many paychecks and has been a fixture there for 50+ yrs....or more.
maybe the MOU with petro china will work out.....or not.