---

Hovensa LLC completed the shutdown of its 350,000 barrel-per-day bunker-producing refinery in St. Croix, U.S. Virgin Islands on Tuesday, the company said in a statement.

Following the shutdown, the complex will operate as an oil storage terminal.

Oil refiner and bunker supplier Hovensa is a joint venture between Hess Corp and Venezuelan state oil company Petroleos de Venezuela SA (PDVSA). The company has also been operating as a supplier of marine fuels at Christiansted, Frederiksted and Port Alucroix.

Losses at the Hovensa refinery have totalled $1.3 billion in the past three years alone and were projected to continue.

"These losses have been caused primarily by weakness in demand for refined petroleum products due to the global economic slowdown and the addition of new refining capacity in emerging markets. In the past three years, these factors have caused the closure of approximately 18 refineries in the United States and Europe with capacity totalling more than 2 million barrels of oil per day. In addition, the low price of natural gas in the United States has put Hovensa, an oil-fuelled refinery, at a competitive disadvantage," Hovensa said in a statement last week.

"We deeply regret the closure of the Hovensa refinery and the impact on our dedicated people," said Brian K. Lever, President and Chief Operating Officer of Hovensa.

"We explored all available options to avoid this outcome, but severe financial losses left us with no other choice. We will provide significantly enhanced benefits for those union and salaried employees who are impacted and will work closely with the government of the U.S. Virgin Islands to ease the transition for the rest of the community," added Lever.

Commenting on the operation of the complex as an oil storage terminal, Hovensa is quoted as saying: "Hovensa's operation of the complex as an oil storage terminal is subject to the completion of negotiations with the Government of the Virgin Islands."