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Tuesday 13 November 2018
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PETROTRIM

$12b in debt, 1700 jobs to go

THAT’S IT: Petrotrin chairman Wilfred Espinet (right) and executive director -Refinery/Marketing Anthony Chan Tack at yesterday’s press conference at the company’s staff club in Point-a-Pierre.
THAT’S IT: Petrotrin chairman Wilfred Espinet (right) and executive director -Refinery/Marketing Anthony Chan Tack at yesterday’s press conference at the company’s staff club in Point-a-Pierre.

DESCRIBING Petrotrin’s refinery as a cancer that cost the company billions in loss and debts, chairman Wilfred Espinet announced its closure yesterday. That decision means 1,700 workers will lose their jobs.

Another 800 employees will be assigned to the state-owned oil giant’s redesigned exploration and production department. Espinet said the period of transition will begin on October 1.

He told reporters during a press conference, the restructuring of the company is necessary to ensure that Petrotrin can make a profit in the future.

The board met with the Oilfield Workers’ Trade Union (OWTU) earlier in the day at the Petrotrin staff club.

“We are now 101 years-old in the refinery business and the purpose of getting into it is no longer relevant, but we are holding on to it because there are emotional ties. And because it is there, what we’ve done now as a board is look at it hard and said “Hey, let’s start from a clean sheet.”

He said when the current board was appointed last September, they were mandated to find ways to stop the company from losing money.

“With that, we had a continued programme of looking at all sorts of ways to make this work. We came to the conclusion that if we wanted to be able to pay back the debt, and if we wanted to be able to have a profitable company that could be sustained over time, we would have to take out what was the cancer of the operation and that would have been the refining and marketing.”

Espinet said the union is welcome to suggest alternatives to the shutdown, but he also said the course of action will not be changed unless the union can come up with a better proposal.

He said workers will not be thrown out on the pavement, and the company will construct an exit plan to ensure that. But he said alternatives may not be accepted as the company has to make its bond payments.

“If we don’t come up with a solution to the bond payments within a matter of weeks, we are going to run into serious difficulties as a company.”

Asked about the possibility of the refinery being sold, Espinet said, “No, no, definitely not. Don’t even think of it being sold. There is no plan to sell it. The reason it is being shut down is because it is not economic to run it. I think we have to be careful that we don’t put things in people’s minds, there is no likelihood of that refinery being sold.”

Director of the Refining and Marketing unit Anthony Chan Tack also weighed in, saying with a 70 per cent higher operating cost than competitors, anyone who buys it will lose money.

“One assumes anything you sell can be a profitable business, you think someone is going to buy it to lose money? The refinery is a difficult business to make money in, given the state of the refinery and the kind of investment that has to be done, it is going to be very difficult for somebody to recover that, plus buying the refinery and running it,” Chan Tack said.

Espinet said all refined fuel products, except LPG, will now be imported.

Asked if this will cause prices at the pump to increase, Espinet said that is a political decision.

“The cost of the fuel that we make is not going to be any less expensive than the cost of the fuel you are importing. What is the cost and what you pay for it are two different things. That is a policy decision, it has nothing to do with costs of the fuel.”

Espinet says the company’s Exploration and Production departments will benefit from the refinery’s closure as money can now be invested in these operations.

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