KINGSTON, Jamaica (AP) — Valero Energy Corp. announced Monday that it will convert its shuttered oil refinery on the southern Caribbean island of Aruba into a fuel storage facility, leaving hundreds of employees jockeying for positions at the downsizing operation.
The San Antonio, Texas-based company suspended refining operations in March at the Aruba refinery, which processed heavy, sour crude and once had a capacity of about 275,000 barrels a day. It said it stopped producing gasoline and other fuels at the site due to high oil prices and "unfavorable refinery economics."
On Monday, Valero announced that it had decided to reorganize the unprofitable site into a storage terminal on the Dutch Caribbean island of just over 100,000 inhabitants. For years, Valero has been trying unsuccessfully to sell the Aruba refinery, which the company says is still ready to restart if a buyer can be found.
Valero Chairman and CEO Bill Klesse said Aruba's deep-water and smaller berths will give the terminal flexibility to load the biggest crude ships. "We believe that Aruba has the assets to compete as a world-scale crude and refined products terminal," Klesse said in a statement.
The company's local subsidiary has notified employees that it will require a significantly smaller workforce. The reorganization and workforce reduction is expected to be completed before the end of the year.
From Aruba, Valero spokesman Bill Day said about 600 employees are currently at the site. They were kept on the payroll during the suspension of refinery operations.
"Valero hasn't determined the number of employees to staff the terminal operations yet; that will be done over the next several days in meetings with employees and union representatives," Day said.