Document reveals Origin International's plans for idled Come By Chance refinery
A document leaked to CBC News in a bid to influence public opinion reveals an ambitious plan by U.S.-based Origin International Inc. to transform the Come By Chance oil refinery into a "world-leading" operation focused on job creation and protecting the environment.
But it's a strategy that hinges on an injection of public money.
Meanwhile, the current owners, New York-based investment management firm Silverpeak Strategic Partners, is playing it cool, saying in a statement Monday it has had preliminary discussions with "several organizations and investors from around the globe."
"We can confirm we have received a letter of intent from Origin International. A letter of intent is not an offer," the statement, attributed to North Atlantic Refining, reads.
North Atlantic said its objective is to find a "qualified investor for North Atlantic and the refinery," and that any potential deal will be time-consuming and complex.
If a sale is not possible "in the near term," North Atlantic said, it is prepared to continue operating the site as an import terminal for fuels, which has been the case since the refinery was idled.
These latest developments reflect what has become a protracted and complex process as the fate of Newfoundland and Labrador's only refinery hangs in the balance.
In a new twist, it was revealed Monday that prominent St. John's businessman Dean MacDonald is actively involved with Origin's campaign to gain a business foothold in the province.
MacDonald joined Origin CEO Nicholas Myerson during an online meeting Monday with the leadership of United Steelworkers Local 9316, which represents refinery workers.
It's believed MacDonald is among those at the table, willing to invest his own capital into the refinery and retail network of North Atlantic stores.
MacDonald said he would comment "very soon" about his interest in the process.
A source at the meeting described Origin as a "solid entity" with a "good business plan."
In a sign of the public relations strategy linked to its bid, an Origin representative for Origin provided CBC News with a copy of the presentation made by the company to political and union leaders.
The presentation lays out a plan to expand operations at the refinery, including the co-processing of waste oil products, carry out an environmental cleanup, and bring back hundreds of workers who lost their jobs in March after the pandemic shattered oil markets and forced the owners to stop refining fuels at the Placentia Bay facility.
But any plan will be activated only if Origin can reach a deal with Silverpeak for the purchase of the assets, and if governments step up with some public money "to restore the refinery and remediate the environmental risks."
"This plan can be put into reality if federal and provincial governments are willing to act," the document reads.
The level of public investment is not spelled out in the document, but a source with the company says Origin is seeking help to clean up heavily polluted crude sludge ponds and potentially contaminated soil, and to cover costs related to "facilities and operations."
"All to be hammered out in negotiations," the source said, adding that a cleanup would create some 100 additional jobs over five years.
Origin is pressing for the process to move quickly. It wants to finalize a deal with Silverpeak by Dec. 31 so laid-off workers can be back on the job by Jan. 15 and the refinery can return to full operations in June.
The company says speed is critical in order to avoid a cold shutdown of the refinery this winter, which its says would deliver a death blow to the complex facility.
"Local family livelihoods are at stake and the time for decisive action is now," the document states.
In its statement Monday, North Atlantic said the refinery can be maintained in warm idle mode until next spring while they continue looking "for a favourable solution for the refinery."
Meanwhile, with nearly 500 direct jobs — and a substantial chunk of the provincial economy — on the line, the release of the Origin document appears to be part of a strategy to pressure public officials into taking action.
It's not clear why Origin is asking for public money, since its presentation to political and union leaders describe a "viable, fundable, secure, and sustainable plan" for the refinery.
Energy Minister Andrew Parsons repeated Monday that "there's nothing that's off the table as it relates to this process." However, he also stressed that any government money, if approved, will come with strings attached.
"You can rest assured that if government funds go into something, a deal of this, I can guarantee you they won't be going to the bottom line of anybody," he said. "They will be used to ensure a bright future for what we believe is an important asset for the province and for the workforce that's behind it."
Parsons also stressed that this is a private transaction between Silverpeak and "multiple" interested parties.
Since purchasing the assets in 2014, Silverpeak has invested some $400 million into the refinery, and increased its daily processing capacity from 90,000 to 135,000 barrels per day.
A deal to sell North Atlantic to New Brunswick-based Irving Oil collapsed at the last minute in early October, with Silverpeak saying in a letter to employees that a permanent closure would follow if a path to economic viability could not be found.
Baltimore-based Origin specializes in the recycling of waste oil products, and made a competing but unsuccessful bid against Irving for Come By Chance earlier this year.
Now the company is back with a second offer, though the terms have not been disclosed.
Origin CEO Nicholas Myerson has declined repeated interview requests.
