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MoneyTalks - > Money Talks -> What's next for Big West?
What's next for Big West?

What a relief it would be to hear Flying J come clean on what it intends to do with Big West refinery.

That’s probably not going to happen, by the way. The company has steadfastly refused to share with the news media its plans for the Rosedale Highway plant.

Will it take some of the $75 million set aside by a bankruptcy judge last week to pay oil suppliers enough money to get the refinery running full steam again? Don’t know.

Will it sell the refinery to an organization not so encumbered with bankruptcy that its key suppliers don’t trust it to pay for new shipments? Couldn’t say.

Will it let the refinery —producer of 2 percent of California’s gasoline and 6 percent of its diesel — sit idle while the company focuses on more pressing concerns in Utah, where Flying J Inc. is headquartered? Good question.

Or, will it keep stringing everyone along, leaving the plant to operate at a minimal level, its suppliers to wonder whether they will once again have a good home for their barrels of crude, and the refinery’s workers to worry daily about their future. Again, beats me.

But if all we can do is sit, watch and wait, here are a few things to look out for, and what they might possibly indicate:

-    Flying J works out an arrangement with Shell Oil Co. to reopen a pipeline that supplies roughly one-fifth of the oil the refinery normally uses. If that happens, other local oil producers may decide to jump in with new deliveries. Even if they don’t get paid soon for debts invoiced prior to the Chap. 11 filing on Dec. 22, they could still earn money on new barrels.

-    The company blows all the $75 mil on vendors more closely involved with its truckstops, which may provide a bigger and more steady flow of cash. That would probably do nothing to help the refinery.

-    The refinery shuts down again, for supposed maintenance or not. That could suggest the company is either unable to secure sufficient oil shipments or that it has given up trying. Given how expensive it is to fire up such a refinery, letting it go idle again could hint that Flying J is throwing in the towel and might be looking for a buyer.

We really haven’t any reason to believe one or the other of these scenarios might come to pass. Again, Flying J simply isn’t telling.

And the company’s silence is too bad, because Bakersfield has a huge stake in what becomes of  Big West. Its fate is closely tied to local gas prices, jobs and the proposed $700 million expansion of the refinery.

So, keep reading!

Posted in these Groups:
Topics: Big West, refinery, oil
posted by MoneyTalks on Wednesday, January 21, 2009 at 10:03 AM
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posted by adampayne on Jan 21, 2009 at 03:58 PM

I think the Governor of California should use emergency powers and take over the facility. Have it be a state run refinery with the profits going to pay down our debt. At this stage of the game all regular rules of engagement are over with. Shell, Chevron, Occidental, Berry and Big West have all played the state and local government agencies for fools. Sometimes you reap what you sow, and in this case all that bad faith and toxic waste that has built up over the years deserves a reckoning. I reckon even the State of California could do a better job on the refinery watch than this assortment of commodity speculators.

Just do it, Arnold! Let's reduce that debt and budget deficit.

posted by ronmexico on Jan 21, 2009 at 09:17 PM

Ya, lets let the State of California, which is $40,000,000,000 in the hole run that refinery.  The jokers in Sac couldn't run a condom store in a brothel...Amazing the number of people who think government is the answer...

posted by alexlvr on Feb 1, 2009 at 12:44 AM

The only way I see government intervening is in mediating a sale.....offering incentive for someone to buy this refinery.The thought of the government running the refinery or infusing dollars into Big West is ridiculous.  I do believe that they would be relieved to sell it and keep their one small niche refinery in Utah.

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