ENERGY Minister Franklin Khan yesterday said State oil company Petrotrin is facing “ a black hole.” Khan warned that if this situation is not handled properly “it could bankrupt this country.” At a news conference at the Hyatt Regency Hotel in Port of Spain, Khan said, “This issue has fundamental national consequences. it is not a fight between Roget and Rowley. It’s not a fight between Espinet and Roget.” Khan appealed to all parties to treat this matter with “maturity, pragmatism and with a certain level of patriotism.”
While acknowledging Petrotrin is facing a plethora of serious challenges, Khan said, “Petrotrin has served us well in the past.” He was optimistic that “with the right programme, right leadership and more importantly the right intervention”, Petrotrin “can continue to serve us well into the future.” Petrotrin and the Oilfield Workers Trade Union (OWTU) will meet tomorrow to discuss the restructuring plan for the company. Khan said this meeting will also outline “what consequences will follow and the way forward for a restructured Petrotrin.”
He did not speculate on whether or not the OWTU would attend the meeting. But Khan said as the majority union representing Petrotrin’s workers, it would be irresponsible of the OWTU not to attend, given the dire state of the company. As a former Petrotrin employee, Khan said it is “not a nice feeling” for him to see where the company is today. On effects that Petrotrin’s restructuring could have on its fence line communities, Khan said, “They do not really depend on Petrotrin you know. They depend on a viable energy sector.”
Referring to exploration and production, Khan said Petrotrin has no rigs operating because there is no money to drill wells. He said most work overs were done by contractors based in some of these communities but those activities have “almost boiled down to zero.” Khan said this is what Government is trying to protect. “We urge citizens to support Government in its attempt to bring stability and long term to viability to Petrotrin.”
Khan said there has been no discussion about privatising Petrotrin. He also said the return of Shell to TT cannot be linked to Petrotrin. Recalling Shell left TT in 1974, was bought by the state and became Trintoc (one of Petrotrin’s predecessors), Khan said Shell operates largely in natural gas and Government welcomes its investment back in TT. Noting Petrotrin is an “urgent thorny issue” which must be dealt with, Khan said Government cannot adopt the strategy of its predecessor of kicking the can down the road.
He reminded reporters Petrotrin has a debt profile in excess of $13 billion, a US$850 million payment due in 2019, owes the state approximately $3.5 billion in outstanding taxes and royalities and has salaries and wages which are in excess of 50 per cent of its operating cost. Khan said Petrotrin has also become a net user of foreign exchange. Noting the country produces just over 65,000 barrels of oil per day (bopd) and 40 per cent of this comes from the east coast as condensate which is exported, Khan said Petrotrin’s local crude production is 40,000 bopd. With the company’s Pointe-a-Pierre refinery having a capacity of 150,000 bopd, Khan explained, “To keep the refinery running, you have to import 110,000 bopd.”
For every barrel of crude oil refined at Pointe-a-Pierre, Khan said Petrotrin loses US$2.50 to $3.00 per barrel. “So you importing oil to lose money,” he added. Khan said Government and Petrotrin have been transparent about the company’s future. In a statement, the United National Congress accused Government of demonstrating “flash and no substance” about Petrotrin’s future and the Dragon gas deal.