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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 3, 1998
AMERADA HESS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
1-1204 13-4921002
(Commission File Number) (IRS Employer Identification No.)
1185 AVENUE OF THE AMERICAS, NEW YORK, NY 10036
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 997-8500
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Item 5. Other Events
On February 3, 1998, the Registrant issued the following press
release:
Amerada Hess Corporation and Petroleos de Venezuela, S. A.,
announced today their agreement in principle to create a joint venture
to own and operate the Hess petroleum refinery located in St. Croix,
United States Virgin Islands. The refinery is currently owned and
operated by Hess Oil Virgin Islands Corp., an Amerada Hess subsidiary.
Under the terms of the transaction, PDVSA, through its
subsidiary PDVSA Petroleo y Gas, S. A., will acquire a 50% interest in
the refinery for $625 million payable over ten years. The joint venture
will purchase at closing the crude oil and refined petroleum product
inventories and other working capital of Hess Oil Virgin Islands Corp.
On completion of the transaction Amerada Hess presently estimates that
it will record a book loss of approximately $125 million.
The joint venture will enter into a long-term supply contract
to purchase Venezuelan crude oil covering approximately 50% of the
refinery's operating requirements.
The joint venture will construct a coker at the refinery. Upon
completion of construction of the coker, the joint venture will
purchase heavy crude oil from Venezuela under a long-term supply
contract.
The transaction is subject to the preparation of definitive
contracts, Virgin Islands governmental authorizations and corporate
board approvals.
The Hess refinery on St. Croix is a world class merchant
refinery with a capacity of 500,000 barrels per day. A state of the art
fluid catalytic cracking unit, one of the largest in the world,
commenced operating in October 1993, giving the refinery the capacity
to manufacture approximately 175,000 barrels per day of gasoline,
including all the new environmental gasolines required in the United
States and internationally. Since the Virgin Islands is located only
500 miles from Venezuela, the HOVIC refinery is strategically
positioned to serve growing petroleum product demand in both North
American and South American markets.
In announcing the transaction, John B. Hess, Chairman and
Chief Executive Officer of Amerada Hess stated that "the joint venture
with PDVSA will substantially strengthen the economic and competitive
position of the St. Croix refinery and enhance its future
profitability. The coker will permit the
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refinery to run lower cost, heavy Venezuelan crude oils and upgrade
them into higher value light products making the refinery economically
more competitive. The coker construction project, estimated to last
approximately three years, will also bring much needed jobs and
additional revenues to the Virgin Islands."
Amerada Hess will retain full ownership of and continue to
expand its United States Hess brand retail gasoline station and
convenience store business and will retain full ownership of its
terminal distribution network, its marine and truck transportation
assets and its Port Reading, New Jersey gasoline manufacturing
facility. Amerada Hess will also continue to invest in and expand its
worldwide exploration and production business.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
AMERADA HESS CORPORATION
Date: February 12, 1998 By: /s/ John Y. Schreyer
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John Y. Schreyer
Executive Vice President and Chief
Financial Officer
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