CHRISTIANSTED — An offer of $62 million won the shuttered Limetree Bay Refinery for Jamaica-based West Indies Petroleum (WIP) after a two days of escalating bidding that began Friday.
The auction took place in U.S. Bankruptcy Court for the Southern District of Texas and was presided over by Judge David Jones.
West Indies Petroleum, primarily an oil storage company based in Port Esquivel, now has until January 21, 2022 to close the deal. If the company is unable to, St. Croix Energy will be the default winner of this second auction.
The outcome of the two-company bidding war is a stark reversal of fortune for St. Croix Energy, which tentatively won the first auction for the refinery on November 18.
However, Judge Jones approved a motion filed by Limetree Bay Refinery to reopen the auction to a new bidder.
At the time, Limetree Bay attorney Elizabeth Green explained to the judge that WIP, a firm which specializes in bunker services and oil storage, was originally part of the auction, but its chief executive had fallen ill and needed emergency attention in the days before the auction was set to take place and that prevented the company from proceeding at the time.
At the time of the motion to reopen, WIP was offering $30 million cash upfront, which was more than St. Croix Energy’s $20 million in cash upfront.
St. Croix Energy’s final bid was $57 million in cash on Saturday evening, but it was not enough. West Indies Petroleum countered at $62 million, which forced SCE to drop out of the competition.
The U.S. Environmental Protection Agency (EPA) spoke as a neutral party during the December 6 motion to reopen hearing, pointing to West Indies Petroleum’s “clean break” plan that would see it seeking a new agreement with the EPA for restart of the refinery, a process that could take up to 24 months or more.
After investors poured $4.1 billion into reviving an aging south shore refinery, the bankrupt facility was seemingly auctioned off for tens of millions of dollars to a new company called St. Croix Energy LLP, an upstart local company with no pedigree in the international petrochemical industry.
St. Croix Energy, led by payday loan baron David Johnson, bid $20 million for the refining assets and emerged as the leading prospect for the facility, which was shut down by U.S. environmental regulators earlier this year.
Meanwhile, grass roots people on St. Croix remain apprehensive that whoever restarts the refinery will undoubtedly again rain down oil and gas on their homes — due to the inherent decrepitude of the 1960’s-built oil refinery.
“This is a waste and they wont stop or shut it down permanently till they blow up the island,” Ken Lett said. “The technology is obsolete good people and this place has more safety issues than you want know about. scrap this place and move on. The Government sees money…I see hazardous waste and citizens getting sick and barely making any income from employment.”
But big business will prevail ultimately where there is ample opportunity for baksheesh as new players enter the USVI marketplace.
“Whomever wins will be aided in their effort to get a permit,” Governor Albert Bryan said. “The government has already begun the work in paving a road to a safe restart with the EPA.”
