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There was another groundbreaking development in efforts to save the Come By Chance oil refinery late Thursday afternoon, with owner Silverpeak turning down an offer to sell the idle plant to Origin International.
In a brief statement, Silverpeak said Origin’s offering “was not in the best interest of our stakeholders or the long-term benefit of our employees and the people of Newfoundland and Labrador.”
Silverpeak said Origin will have to come back with a better offer if future talks take place, and that it will continue its efforts to find a solution to the refinery’s problems.
It is the latest twist in an ever-changing saga since North Atlantic Refining Limited stopped producing fuels in March and laid off all but a handful of hundreds of people working at the site.
And Silverpeak’s statement came just hours after Origin CEO Nicholas Myerson made his first public comments on his company’s offer to take over the refinery.
Last week Origin made what Myerson described as a competitive bid for the refinery and a chain of retail stores.
But during a series of media interviews Thursday morning, Myerson reported that he was getting the cold shoulder from Silverpeak, describing what he called “radio silence” following his offer.
Myerson, speaking from his home in Long Island, New York, even called on political leaders to intervene.
“Right now we are at a point where we believe the government must decide which strategic path it should follow. Either a path of uncertainty, which we are currently in, or there may be a path to execute a clear plan on how to bring these employees back. to work and to restart this refinery, ”Myerson said.
‘A serious situation’
Myerson didn’t offer details on what politicians can do to help, but said it’s not good enough to say it’s a matter between two private companies.
“We’re talking about hundreds of jobs. We’re talking about environmental health and the safety of the asset. I don’t know what the government can do. I’m not an expert in that. But this is certainly a serious problem. Situation,” he said. .
Energy Minister Andrew Parsons responded to Myerson’s comments Thursday afternoon, saying the provincial government is doing all it can.
“There have been open lines of communication with Origin, Silverpeak, and anyone involved, but ultimately this is an asset that isn’t government-owned. It’s privately owned,” Parsons said.
Parsons said Origin needs to remember it’s not the only game in town.
“I can tell you that there are other groups out there that have signed the documentation. They are actively conversing with Silverpeak,” the minister said.
Silverpeak said they had “several preliminary conversations with organizations and investors around the world”.
Origin released a statement Thursday night in response to Silverpeak’s rejection, once again saying its offer was competitive.
“We have adequate financial support. We have shared this information with the Newfoundland and Labrador government. We would like to encourage Silverpeak to tell us with the Newfoundland and Labrador people what specific issues they would like to address.”
Origin called for “transparency and openness”, stating that “the future of the refinery, its employees and the regional economy hangs in the balance”.
Refinery in warm idle mode
The refinery is currently being kept in what’s called warm idle mode, which would make a quick and economical restart.
Silverpeak said it can continue to do so until next spring, at which point it will permanently close the refinery if a viable solution is not found.
Myerson is confident in his company’s strategy, despite the refining business around the world struggling.
“Come By Chance is a truly unique resource. It is located in an area halfway between the US and European markets. It is a logistics location that optimizes the transport of waste oils, used vegetable oils and normal petroleum products. The asset itself. it’s unique in that we think it has all the right equipment to co-process, “he said.
“We also believe it has a highly skilled workforce … and we believe it would be an ideal candidate for this type of business plan in this new era of refining.”
1 percent of the provincial employment
The refinery was in a growth phase prior to the pandemic, with production increased to 130,000 barrels per day, future expansion plans and support for around 400 direct jobs and 200 contracts.
According to a document prepared by the Department of Finance last month, the refinery accounted for one percent of the province’s total gross domestic product last year, or about $ 300 million, and just under one percent of employment. provincial.
But the pandemic has hit oil markets, and the North Atlantic has said it is no longer possible to run the refinery.
Myerson did not provide details on his company’s bid price for the refinery, but denied that he was trying to raise the assets at a discounted price at a time of economic upheaval.
“This would have been an asset we would have liked to buy if the refining market had been in a good position right now,” he said.
Origin is a Maryland-based company that specializes in waste oil recycling, but has a big plan to transform the Come By Chance refinery into what Myerson calls a co-processing facility.
The strategy is to continue to refine crude oil into various fuels for transportation and heating, but also to treat waste mineral oils and gas vapors, which are already a specialty of Origin, and to expand into the processing of used vegetable oils. .
Origin also promises to make significant environmental improvements, with options such as generating their own electricity from wind turbines.
“We believe having this business plan and this co-processing capability is a good and profitable business plan, even in today’s refining markets,” he said.
“We really believe this resource could be an important example of how to take a traditional oil refinery and create an environmental, social and governance energy platform.”
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