March 28, 2005 — The Hovensa oil refinery, co-owned by a Venezuelan company and New York-based Amerada Hess Corporation won't suffer any setbacks as relations between Venezuela and the United States sour, company officials and experts said.
U.S. officials and Venezuelan President Hugo Chavez have waged a war of words recently, with Chavez threatening to cut off oil to the United States if it were to back an attempt to oust him.
Hovensa officials, however, say they're sure the crude oil will keep coming, despite the rhetoric.
About 60 percent of the refinery's crude comes from Venezuela, the world's fifth largest oil producing country in the world. It supplies more than 13 percent of U.S. crude oil imports, said Alex Moorhead, Hovensa vice president Government Affairs, Community Relations.
Hovensa, the second largest refinery in the Western Hemisphere, is far too important to both countries to be affected by the political spat, Moorhead and industry analysts said.
Moorhead said it was inconceivable to him that one of Hovensa's parent companies would do anything to deliberately restrict the flow of Venezuelan crude because it would result in reduced profits.
Oil prices set a new record high last week and are currently hovering above $55 a barrel.U.S. demand for oil requires more refineries, not less; and the United States is Venezuela's best customer, said Gal Luft, executive director of the Institute for the Analysis of Global Security, a Washington-based energy policy think tank.
Luft said the refinery, capable of producing 50,000 barrels of fuel a day, is vital to both nations.
Crude oil varies widely in impurities, such as sulfur content, he said, and right now the United States has more refineries specifically built to process Venezuelan crude than any other country.
Hovensa, co-owned by New York-based Amerada Hess Corporation and Petroleos de Venezuela, S.A., the national oil company of Venezuela, is St. Croix's largest private employer.
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