ST THOMAS, USVI -- Late on Friday, US Virgin Islands Governor John de Jongh sent a letter to the owners of the HOVENSA refinery formally informing them of the Legislature’s rejection of the proposed fourth amendment to the concession agreement, which sets forth the contractual relationship between the government of the US Virgin Islands and HOVENSA.
Governor John de Jongh
On August 7, the USVI Legislature voted against ratification of the proposed fourth amendment agreement that would have governed the sale of the HOVENSA refinery on St Croix. Voting against ratification were Senators Terence Nelson, Nereida O'Reilly, Alicia Hansen, Diane Capehart, Kenneth Gittens, Shawn Michael Malone, Janette Millin Young, Tregenza Roach, Myron Jackson, Clifford Graham and Clarence Payne III. Voting in favor of the Fourth Amendment Agreement were Senators Sammuel Sanes, Judy Buckley and Donald Cole. At-large Senator Craig Barshinger was absent from the senate session.
De Jongh’s letter was addressed to Lawrence H. Ornstein, executive vice president of Hess Corporation, and director general Omar Bravo of the Venezuelan national oil company, Petroleos de Venezuela, SA.
In his letter, the governor noted that, despite the best efforts of HOVENSA and those of his administration and many members of the US Virgin Islands community, the Legislature refused to approve the proposed amendment to the concession agreement. The governor informed the owners of HOVENSA that the effect of the Legislature’s vote is that the current interim agreement between the parties will expire on August 15, 2013, at which time the provisions of the concession agreement that binds the parties will go back into effect.
“The government expects HOVENSA to comply fully with all its obligations under that concession agreement,” de Jongh wrote.
The governor noted that upon the expiration of the interim agreement, “The government will take all necessary measures to enforce those obligations and protect its rights.”
De Jongh restated the long-held position of the government that a stand-alone storage terminal business operating free from generally applicable import duties is not permitted by the existing concession agreement and is not in the long-term interest of the US Virgin Islands.
In anticipation of the expiration date of August 15, de Jongh also instructed Attorney General Vincent Frazer to write to US Customs and Border Protection and inform them to resume collecting duties on non-exempt shipments of petroleum products for storage at HOVENSA. The six percent customs duty will go into effect on August 16, 2013, the day after the interim agreement expires.
Government House made public de Jongh’s letter
to the owners of HOVENSA and Frazer’s letter to Louis W. Harrigan, Port Director for US Customs and Border Protection.