Sale of Newfoundland refinery falls through as owners clash over price

(Reuters) – The sale of a remote Canadian refinery has been scuttled as two former oil traders running the company locked horns over the value of the plant, according to three people familiar with the discussions.

The partners, former traders Neal Shear and Kaushik Amin, sought to sell the 130,000 barrel-per-day refinery in Come By Chance, Newfoundland last year to privately held Canadian refiner Irving Oil, which was seen as the leading bidder.

The deal fell apart in recent months and is unlikely to be rekindled because Shear and Amin are at odds over the sale price, according to three people familiar with the firm, who spoke on condition of anonymity as the events were private.

Shear was ready to sell to Irving for an undisclosed value that two of the people said was about C$250 million. Amin, however, was pushing for a C$400 million price tag, according to the people. Shear’s name has since been removed from the firm’s website, and talks with Irving have been put on hold. There are no longer any immediate plans to try to sell the plant, the people said.

Gloria Warren-Slade, communications manager for the Come By Chance refinery, did not respond to a request for comment.

Irving Oil did not respond to requests for comment.

The refinery’s value has fluctuated widely over the last 12 years. It was sold for C$1.6 billion  in 2006 and re-sold for C$930 million three years later, but the two bought it in 2014 for just C$97 million due to a slump in world oil prices.

Having paid less than any other buyer of the plant, Amin and Shear wanted to use Come By Chance as a linchpin for later purchases of other fuel shipping infrastructure globally, or to sell quickly at a profit.

Come By Chance’s value for suitors is hampered by its isolated locale, reducing its access to cheap domestic crude that has boosted margins for Gulf Coast or Midwest refiners, and because it lacks the processing scale of larger refineries.

The refinery’s relative proximity to Europe and shorter shipping time to eastern ports in Latin America is an advantage, but it has still been hurt by slimmer margins than other North American refiners.