21 June 2008

NLRC seeks bankruptcy protection

Newfoundland and Labrador Refining Corporation, proponents of a 300,000 barrel per day heavy sour crude refinery for Placentia Bay are seeking court protection against creditors.

One of the creditors, SNC Lavalin, served notice on Thursday that it was seeking a court declaration that NLRC was bankrupt.

In a statement issued Friday, NLRC said:
NLRC management is currently working with its advisors to determine the optimum method of restructuring, which may include the sale of its assets. A further update will be provided at a later date once key decisions are made.
Earlier this week, NLRC director Brian Dalton told the annual NOIA oil and gas conference that the company was seeking investors in the Middle East, India and the Far East.

The refinery project has been in trouble for some time.

NLRC acknowledged in March 2008 that it had been unsuccessful in finding investors in the United States. Comments at the time were similar to ones given this week to CBC News:
Dalton said the company's problems with financing are "due to the deterioration of global capital markets."
By contrast, as Bond Papers previously noted, Dalton told the Financial Post in April 2007 that the project would only succeed if the company could find one major oil player.



"Oh to be in the Gulf now that the cash is in bloom"
in which Danny Williams, Kathy Dunderdale, Rodney Macdonald and Gary Lunn all head to the Middle East around the same time.

"Refinery marginalia" (October 2006) which notes, among other things the similarity between a provincial government news release and one issued by NLRC.

"Curious refinery logic"
(October 2006)

"Chances of second refinery in NL more remote"
(October 2006)

"Two degrees of separation revisited" (August 2006) Altius, Aurora, Newfoundland and Labrador Hydro, Brian Dalton, Dean Macdonald, Danny Williams.
At the same time, Altius is also pursuing a feasibility study on a second refinery in the Come by Chance area. The study was announced in February by Premier Danny Williams and then-energy minister Ed Byrne. The announcement was highly unusual since government [apparently - ed.] played no role in the [apparently - ed.] entirely private venture.