Hess 2000 Annual Report Download - page 38

36
The Corporation purchased refined products from
HOVENSA at a cost of approximately $2,080 million
during 2000, $1,196 million during 1999 and $151 million
during the two months ended December 31, 1998. The
Corporation sold crude oil to HOVENSA at a cost of
approximately $98 million during 2000, $81 million dur-
ing 1999 and $7 million during the two months ended
December 31, 1998.
As part of the formation of the joint venture, PDVSA, V.I.,
a wholly-owned subsidiary of PDVSA, purchased a 50%
interest in the fixed assets of the Corporation’s Virgin
Islands refinery for $63 million in cash and a 10-year note
from PDVSA V.I. for $563 million bearing interest at 8.46%
per annum and requiring principal payments over its term.
At December 31, 2000 and December 31, 1999, the princi-
pal balance of the note was $491 million and $539 million,
respectively. In addition, there is a $125 million, 10-year,
contingent note, also bearing interest at 8.46% per annum.
The contingent note was not valued for accounting pur-
poses. PDVSA V.I.’s payment obligations under both notes
are guaranteed by PDVSA and secured by a pledge of
PDVSA V.I.’s interest in the joint venture.
In February 2000, HOVENSA reached agreement on a
$600 million bank financing for the construction of a 58
thousand barrel per day delayed coking unit and related
facilities at its refinery and for general working capital
requirements. In connection with the financing, the
Corporation and PDVSA V.I. agreed to amend the note
received by the Corporation at the formation of the joint
venture. PDVSA V.I. deferred principal payments on the
note and the interest rate was increased to 9.46%. How-
ever, in October 2000, PDVSA V.I. exercised its option to
repay principal in accordance with the original amortiza-
tion schedule and the interest rate was reduced to the
original rate of 8.46%. Principal payments are due ratably
until maturity on February 14, 2009.
6. Short-Term Notes and Related Lines of Credit
Short-term notes payable to banks amounted to $7 million
at December 31, 2000 and $18 million at December 31,
1999. The weighted average interest rates on these borrow-
ings were 6.8% and 6.3% at December 31, 2000 and 1999,
respectively. At December 31, 2000, the Corporation
has uncommitted arrangements with banks for unused
lines of credit aggregating $216 million.
7. Long-Term Debt
Long-term debt at December 31 consists of the following:
Millions of dollars 2000 1999
73⁄8% and 77⁄8% Debentures,
due in 2009 and 2029 $ 990 $990
6.1% Marine Terminal Revenue
Bonds — Series 1994 —
City of Valdez, Alaska,
due 2024 20 20
Pollution Control Revenue Bonds,
weighted average rate 6.6%,
due through 2022 53 53
Fixed rate notes, payable principally
to insurance companies,
weighted average rate 8.5%,
due through 2014 645 915
Global Revolving Credit Facility
with banks —120
Project lease financing, weighted
average rate 5.1%, due
through 2014 178 183
Notes payable on asset purchases,
weighted average rate 6.6%,
due through 2003 147 —
Capitalized lease obligations,
weighted average rate 6.9%,
due through 2009 78
Other loans, weighted average rate
8.0%, due through 2007 33
2,043 2,292
Less amount included in
current maturities 58 5
Total $1,985 $2,287