Moves continued on several fronts here and in New York toward a San Juan bankruptcy filing by the Commonwealth Oil Refining Co. (CORCO), the second largest petroleum and petrochemical producer in the Caribbean with some $1 billion in annual sales.
Top company officials were huddled in New York with U.S.-based creditors holding more than $300 million in short- and medium-term notes. And other Commonwealth officers were in another closed-door New York conference with executives of Tesoro Petroleum Corp., the San Antonio-based firm which holds the controlling interest in Corco, as well as Kentucky-based Ashland Oil, Inc., which is trying to back out of a tentative commitment to take over the Puerto Rico refiner from Tesoro.
Participants in the New York meetings reportedly agreed with legal counsel to refuse to talk to the press there and in Puerto Rico because of what a Corco spokesman termed the "extremely delicate" state of the various negotiations now under way.
But the same San Juan spokesman predicted that an official announcement would be forthcoming on Wednesday - the day the extended Ashland purchase option expires - or on Thursday at the latest, when a Chapter XI bankruptcy filing is being predicted by informed government and industry sources here.
Since the world's oil crisis started, Corco has suffered an estimated $80 million in operating losses.
Tesoro has sunk at least $115 million into Corco since taking over operating control and moving Corco executive headquarters to San Antonio during mid-1975. Informed industry sources, however, say Tesoro is unwilling to pour any more operating cash down the drain.
Thus the apparent refusal by Ashland to inject any more its own capital will almost certainly mean foreclosure by the main Corco creditors - including Tesoro - and a petition within the next few days by Corco for chapter XI protection.
Mariano Mier, president of the Government Development Bank for Puerto Rico (GDB), told The Washington Post last week that the financial collapse of Corco - which supplies more than half of the Commonwealth of Puerto Rico's oil, gasoline and petrochemical feedstocks, as well as supplying much of U.S. East Coast with fuel oil and derivatives - is so imminent that a government contingency stockpiling plan already had been put into effect.