Town thrown into uncertainty as union braces for layoffs at Newfoundland refinery

The oil refinery in Come By Chance, N.L. is shown on Tuesday, Oct. 6, 2020. THE CANADIAN PRESS/Paul Daly

COME BY CHANCE, N.L. — At the Kwik-Way convenience store in Arnold's Cove, N.L., Holly Hapgood has to turn her head away to hide the tears as she talks about news of impending layoffs and possible closure at the nearby oil refinery in Come by Chance.

"Terrible," she said over and over. "Terrible. It will be one big spiral effect."

Workers at the refinery are bracing for layoffs in the wake of news that a deal to purchase the facility has fallen apart. New Brunswick-based Irving Oil announced in May that it had signed a deal to purchase North Atlantic Refinery Ltd., the operator of the refinery. But on Tuesday morning, Irving released a statement saying the agreement for the purchase had been terminated, without providing additional details.

"It's devastating news . . . . The workers, they're in shock," Glenn Nolan, president of the United Steelworkers Union Local 9316, said Tuesday. He spoke to reporters outside the Arnold's Cove municipal hall, shortly after an all-staff meeting at the sprawling refinery just a few minutes drive away.

Layoffs are coming, but it's not yet certain how many will lose their jobs or what will happen to the 135,000-barrel-a-day facility, Nolan said. When asked if it could shut down for good, he said: "It's a very good possibility. That's what the scare is about."

The refinery employs about 500 people, some of whom have worked there for decades, and they stand to lose jobs, health care benefits and their futures, he said.

Premier Andrew Furey and Industry, Energy and Technology Minister Andrew Parsons said Monday night that discussions were ongoing with Silverpeak, the U.S.-based investment firm that owns the refinery, and that the company continues to "work on its options."

As Nolan spoke to reporters in the town building's parking lot, the sounds of children playing in the nearby schoolyard rose up around him. Arnold's Cove is a bustling, picturesque town of just under 1,000 people, buoyed mainly by jobs at Icewater Seafoods, a cod processing plant, and the refinery itself.

Bad news at the refinery will rock smaller neighbouring towns like Sunnyside and Come By Chance, too, said Donna Stringer, general manager at the Arnold's Cove Inn. "It's not just this area, you got workers everywhere, the whole province, really," she said. "I hope something turns around."

There have been layoffs at the plant before, and the town survived, she acknowledged. "But to hear `permanently closed,' I don't think we've heard those words. It's scary."

Many workers at the inn have partners, siblings or parents who've worked at the refinery for a decade or more, she said. "It's everything for people. Their jobs, their income. If it permanently closes, we will see people leaving for sure."

As customers came and went from Hapgood's store, the refinery's uncertain future dominated the conversation. People shook their heads slowly in disbelief.

Refinery workers bring money to the town and business to her store, Hapgood said. But hundreds of workers were laid off this spring as the pandemic hit the province and oil prices crashed. Like Stringer, she's hoping something will turn around.

On Tuesday afternoon, Nicholas Myerson, CEO of U.S.-based hydrocarbon recycling company Origin International, said the company is interested in the refinery. "We are limited in the commentary we can provide at this point as we have had no opportunity to do any due diligence and are not aware if any new sale process has begun," he said. "We await further clarity on the status of Come by Chance."

The company wrote to the Newfoundland and Labrador government in June to say it had previously bid on North Atlantic Refinery and that it "stands willing and able to re-engage in its bid" if the Irving deal fell through.

Nolan said he'll be meeting with government representatives over the coming days to find out what options are available for the refinery and for its workers. Tuesday's news is the latest blow to the province's oil and gas sector. Several major offshore oil projects have been delayed or suspended in the wake of the pandemic and crashing global oil prices. Husky Energy recently announced it was reviewing its operations in the province as well as its $2.2-billion West White Rose project.

When asked if refinery workers were polishing off their resumes to look for more work, Nolan shook his head.

"There's nothing out there," Nolan said.

This report by The Canadian Press was first published Oct. 6, 2020.