Come By Chance refinery sold

Ashley
Ashley Fitzpatrick
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Jobs to be maintained according to early statements

The oil refinery at Come By Chance has been sold to SilverRange Financial Partners LLC of New York. The sale includes the North Atlantic Refinery Ltd. retail business.

The Come By Chance oil refinery. File photo

Speculation had been ongoing for nearly a year over the future of the 115,000 barrel-per-day refinery, owned by Harvest Operations Corp., under the Korea National Oil Corporation (KNOC).

Terms of the sale were not disclosed.

A joint statement released on the sale notes SilverRange has offtake agreements for oil from the refinery, and the provincial government worked closely to assure existing employment and economic benefits would be maintained.

“We are very pleased to announce the sale of North Atlantic Refining Ltd., our Newfoundland-based subsidiary. Given Harvest’s focus on investment in Canada’s upstream business, we remain committed to maintaining and growing our operations in Western Canada,” said John Wearing, Harvest’s chief operating officer, in a statement.

“At the same time, the Come By Chance refinery will remain an integral part of the local economy in Newfoundland and an important component of the energy supply chain on the Atlantic seaboard.”

The sale includes 53 North Atlantic gas stations, including 14 Orangestore branded locations.

 

Buyer says refinery technology a draw

“This agreement provides a unique opportunity for SilverRange. (North Atlantic) is strategically located along Atlantic crude oil shipping routes and provides access to petroleum markets in Europe and the U.S. Eastern seaboard. Its clean fuel technology enables the refinery to produce low-sulphur, clean fuels, providing flexibility to refine crudes from many parts of the world. In addition, the marketing business is a unique and attractive stable margin asset,” said Harsh Rameshwar of SilverRange.

“We look forward to becoming a part of the Newfoundland community.”

Natural Resources Minister Derrick Dalley has welcomed the refinery’s new owners.

“The successful agreement for the sale of North Atlantic Refining Ltd. is good news for the people of the province, particularly those who make their living from the oil refinery in Come By Chance as well as the other operations throughout the province,” he said, in the same statement.

Workers at the refinery were gathered together and informed of the sale this morning.

“We’re very excited about it. It’s been a long year, but we’ve worked with everybody, the union has, and it’s a win-win situation for everybody,” said Perry Feltham, an occupational health and safety representative with the union local, United Steelworkers 9316, when contacted by The Telegram.

 

Deal shatters predictions

Come by Chance Mayor Joan Cleary is also celebrating the news. “I’m ecstatic actually,” she said.

The refinery’s history includes ups and downs. Construction was finished under in Shaheen Resources in 1973. That company went bankrupt in 1976, leading to a decade where the facility was not operating.

Newfoundland Processing Ltd. restarted the operation, maintaining it until a 1994 sale to the Vitol Refining Group. It was run by Vitol until 2006 and then sold to Harvest Energy. Harvest’s operation was bought by the KNOC in 2009.

Significant investments have been made at the refinery over the years, including hundreds of millions of dollars worth of upgrades under KNOC.

That said, recent shutdowns of refining operations in Canada — specifically the change of the Imperial Oil refinery in Halifax to a terminal station — paired with a consultant expressing little optimism over the refinery’s future, led to speculation the refinery might shut down.

The joint statement issued today on the sale, set to close in the fourth quarter, notes SilverRange has committed to investing in new upgrades at the facility.

“SilverRange will be reducing overall sulphur dioxide emissions at the refinery and undertaking a capital investment program at the tank farm,” it states.

As part of the deal, the provincial government has provided assurances “SilverRange’s acquiring entity will not be responsible for any pre-existing environmental liabilities.”

afitzpatrick@thetelegram.com

Organizations: North Atlantic Refining, Korea National Oil

Geographic location: Western Canada, Newfoundland, Europe U.S. Eastern

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Recent comments

  • Jack
    September 05, 2014 - 21:48

    Also turns out that British Petroleum will also gain significant control over the refinery, gas stations, and convenience stores, meaning the end of the "Orange Stores" and "North Atlantic" renamed "BP".

  • Jack
    September 05, 2014 - 13:13

    While most people see the Come By Chance refinery being sold as a good thing, in reality, its not and here's why. For starters, Silverrange Financial Partners have little or no expertise in the oil and gasoline extraction industry; in fact, if you look at their profile on the Manta.com website, their main business genre is financial planning, not natural resource management and extraction, meaning Harvest Energy set the Come By Chance refinery up for failure. The second concern is that since Silverrange Financial Planners is a new company with limited financial resources, they don't have the money to maintain or even upgrade the Come By Chance refinery; once again, this company is around for just two years according to Manta.com. The final concern is that Silverrange Financial Partners and Harvest Energy didn't make an effort to negotiate with Petro Canada and Suncor to remove a clause that prevents this refinery from selling its products to the Canadian Market, so that the refinery can take advantage of the recent shutdowns in other Atlantic Basin refineries such as Halifax. Due to lack of information about Silverrange Financial Planners, lack of available financial resources, and the fact that their new owners only existed for two years, the Come By Chance refinery sale is actually a bad deal for Newfoundlanders and Labradorians. Bad move for Harvest Energy there.

    • Nichol
      September 05, 2014 - 22:31

      The principals of SilverRange have lots of experience in the commodities business. You really don't know what you're talking about. http://www.streetinsider.com/Press+Releases/Harvest+Operations+Announces+Sale+of+Newfoundland+Refinery+and+Related+Marketing+and+Retail+Operations/9809907.html