WASHINGTON (dpa-AFX) - Integrated oil and gas company Hess Corp. (HES) Wednesday said it will take an after-tax charge of $525 million against its fourth-quarter earnings due to the shutdown of Hovensa L.L.C. refinery in St. Croix, U.S. Virgin Islands, a joint venture with Petroleos de Venezuela S.A. Hovensa noted that losses at the refinery have totaled $1.3 billion in the past three years alone and were expected to continue. According to Hovensa, the losses were mainly due to weakness in demand for refined petroleum products as a result of the global economic slowdown and addition of new refining capacity in emerging markets. In addition, low natural gas prices in the U.S also impacted the oil-fueled refinery. Hovensa said it had explored all available options to keep the refinery operating, but severe financial losses resulted in the closure of the refinery. Following the shutdown, the company plans to operate the complex as an oil storage terminal. Last Thursday, New York-based Hess had announced a $6.8 billion capital and exploratory budget for full-year 2012, compared to the $5.6 billion for 2011. HES closed Tuesday's regular trading at $57.39 on the NYSE.
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