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HOVENSA LLC
12 Months Ended
Dec. 31, 2016
Reorganizations [Abstract]  
HOVENSA LLC

 


10.  HOVENSA LLC

HOVENSA LLC (HOVENSA), a 50/50 joint venture between the Corporation’s subsidiary, Hess Oil Virgin Islands Corp. (HOVIC), and Petroleos de Venezuela S.A. (PDVSA), had previously shut down its U.S. Virgin Islands refinery in 2012 and filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States District Court of the Virgin Islands in September 2015.  To fund HOVENSA's sale process and orderly wind-down, HOVENSA entered into a $40 million debtor-in-possession credit facility with HOVENSA’s owners, the terms of which were approved by the Bankruptcy Court.  On December 1, 2015, the Bankruptcy Court entered an order approving the sale of HOVENSA’s terminal and refinery assets to Limetree Bay Terminals, LLC (Limetree).  The Senate of the U.S. Virgin Islands approved the sale on December 29, 2015, and the sale to Limetree was completed on January 4, 2016.  On January 19, 2016, the Bankruptcy Court entered an order confirming HOVENSA’s Chapter 11 plan of liquidation (the “Liquidation Plan”).  Under the Liquidation Plan, HOVENSA established a liquidating trust to distribute certain assets and sale proceeds to its creditors, established an environmental response trust to administer to HOVENSA’s remaining environmental obligations and to conduct an orderly wind-down of its remaining activities.  The Liquidation Plan also provided for releases of any claims held by HOVENSA and its bankruptcy estate against us and HOVIC, which were effective on the effective date of the Liquidation Plan.  In connection with the Liquidation Plan and HOVENSA’s asset sale, we relinquished our claims against HOVENSA to recover the 2012 and 2015 promissory notes issued by HOVENSA.  In addition, we assumed the HOVENSA pension plan upon the effective date of the Liquidation Plan.  In 2015, we recorded a charge of $30 million primarily representing the estimated net difference between the HOVENSA pension plan obligation and fair value of the plan assets.