Speculation continues about possible sale
Industry minister non-committal about more funding for warm idle
The $16.6 million the province of Newfoundland and Labrador gave to North Atlantic Refinery Ltd. (NARL) in January to keep the facility in warm-idle mode will soon be used up.
The approximately 200 workers workers who were kept on the payroll thanks to that funding are growing nervous about whether or not they will have jobs after June 30.
Industry, Energy and Technology Minister Andrew Parsons says NARL has used about $7 million to $9 million of the money provided by the province.
Parsons wouldn’t say whether the province would continue to fund a warm idle at the refinery.
“Our government is absolutely willing to consider anything that is brought to us to facilitate a deal of this nature that is going to bring jobs and bring productivity, to bring economic benefit,” he said.
“But, like anything, there’s a gauge that we have to apply analysis to. It’s not to invest at any cost.
“But … we will go to the table and sit down to see what we can do with anybody, whether it’s on Come By Chance or any other industry.”
Parsons said the province is not involved directly in negotiations between the current owners — New York-based investment management firm Silverpeak — and a potential buyer.
“That’s a private asset,” he said. “But we are … doing what we can to help, to assist. But when it comes down to it the actual transaction would be between the purchaser and the seller.”
The $16.6-million funding agreement Silverpeak signed with the province earlier this year stipulates that the company must keep the province in the loop, and it has been doing that, said Parsons.
The company
“is actively engaged in negotiations and talks” for a sale, said the minister.
While it would be pure speculation to suggest where those talks might lead, Parsons said the fact Silverpeak is talking to a potential buyer is reason to be positive.
“The reality is the refining world has been hammered in the last 16 months. Seventeen refineries closed in 2020 and it’s estimated to be 21 more on the chopping block in 2021,” said Parsons. “Refining capacity and demand has gone down, so there’s not a long list (of buyers) at the door.”
Other than that, no one is prepared to say much about the progress of discussions between Silverpeak and Cresta Fund Management.
Earlier this month, representatives from Cresta were in Come By Chance to look at the refinery. During that visit they met with members of United Steelworkers Local 9316, the union that represents the workers.
However, union local president Glen Nolan is not prepared the say much publicly about that meeting.
He did indicate there are many meetings, and he will likely be involved in more meetings this weekend.
“I really don’t want to say anything about this … until we get some sort of answer on everything,” he said.
At the Town of Come By Chance, town manager Colin Holloway said as long as there’s a sense that Silverpeak is talking to a potential buyer, there is some optimism in the region.
The refinery has a big economic impact in the town.
The facility is within the municipal boundary, and the town has a tax agreement with the company that’s worth a few hundred thousand dollars annually.
Holloway said the latest 10year tax agreement with the refinery was signed in 2018.
Including the taxes the town collects from the Whiffen Head Transshipment Terminal, the agreements with the two major oil industry operations are worth more than half a million dollars in revenue for the town each year.