LEONARD GRAY / L’Observateur / November 15, 1999

NORCO – The layoff of an estimated 200 employees at Orion Refining Company is anticipated to end in April 2000, as the refinery’s catalytic cracker finally goes on line.

The layoff list was due to go out Friday.

The refinery had been operating at a monthly loss which reached $7-8 million at times, prompting the cutback in the closing months of construction on the cat cracker, spokesperson Joy Patin said.

The cutback, Patin continued, affects those involved in the Phase I, or coker unit, and the front office, but not employees or contractors on the Phase II, or cat cracker unit.

“What’s key is that when the cat cracker is up in April, we’ll be able to process heavy sour crude,” Patin added, “which is what we’re designed to do, and that’s when we’ll see an increased profit margin.”R. Glenn McGinnis, president and chief executive officer of Orion,commented that reaction to the layoff has been “mixed.””Obviously, the folks subject to the layoff are not happy,” he said. “It’sunfortunate to do this at this time of year.”He continued that the company tried to minimize the effect by placing as many as possible with the construction contractors involved in completing the cat cracker, but that still leaves 200 of the facility’s 700 permanent employees to be hit just before the holiday season.

“We’re hopeful when we recall them, they will be available or make themselves available,” McGinnis said.

The troubled refinery began life in the 1970s as Good Hope Refinery, organized by Jack Stanley. However, construction of the plant put an endto the small town of Good Hope when homesites were bought up and residents moved elsewhere.

Good Hope Refinery went bankrupt in the 1980s, and the plant lay neglected for nearly 15 years, until TransAmerican Refining Company took over the site and began a slow rehabilitation.

However, last April, TransAmerican likewise went bankrupt and Orion assumed control of the coker plant and launched construction of the catalytic cracker.

The facility, as first envisioned by Stanley, was to take Venezuelan sour crude oil, normally too expensive to process at conventional refineries, and remove enough sulfur to make it more profitable to process gasoline from it.

The “sweetened” crude would then be shipped to other refineries for further processing.

Construction of a catalytic cracker at Orion would provide a downstream unit for the “sweetened” crude, allowing Orion to make its own gasoline and consequently adding substantially to its own profit margin.

While the layoff ensues, Orion will have a turnaround to tie in the FCC and Alkylation units to the operating units, all to be completed by the end of March when the layoff is anticipated to end.

“We do have other things planned to increase the profitability,” McGinnis said. “We can see the light at the end of the tunnel.”

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