BUY THE REFINERY

THE Prime Minister last night said the Oilfield Workers Trade Union (OWTU) will be given the first option to buy the Petrotrin refinery, which he described as non-viable, as the company shifts its focus to the extraction and export of crude oil.

In a televised address to the nation, Dr Rowley spoke about last week’s announcement from Petrotrin chairman Wilfred Espinet about the refinery’s intended closure, with the loss of 1700 jobs in refining plus the loss of 900 jobs in exploration and production (where staffing will fall from 1700 to 800 workers, according to Rowley.)

“The refining assets of Petrotrin can now be put in a separate company for opportunity attention. "The OWTU will be given the first option to own and operate it on the most favourable terms.” Otherwise he alleged the union had declined his invitation to meet in September 2017, to sit on the new/current board of Petrotrin and attend a Spotlight on the Energy Sector forum.

“Our Pointe- a-Pierre refinery is 101 years old and has reached the end of its commercially viable days. It is now at a stage where it is haemorrhaging cash, and the cost of rehabilitating it is way more than its potential to ever be profitable, competitive or sustainable.”

He said Petrotrin will move from "a state of chronic money-losing to turning a tidy profit" for taxpayers, by closing the refinery, boosting the exploration and export of crude oil, and importing the 25,000 barrels per day of refined products consumed locally.

Rowley said the decision to close the refinery was taken after detailed analysis and deep introspection. “This is not a decision that was made lightly or easily. Options were explored and reviewed. We sent the board back on a number of occasions to consider different scenarios and possibilities. At every step the effect on workers and their families and the communities that rely on refinery operations was considered.”

The changes will let Petrotrin finance its debt and become sustainable, while easing the burden on the Ministry of Finance, Rowley said. He said changes like this are always difficult and traumatic, but is a chance to save the country from financial disaster and provide “new opportunities for entrepreneurship” and “two significant industrial projects for south west Trinidad.”

“But let us not be naïve, there are elements in our society who do not view this change the same way, but see it as an opportunity to further their own ends in mischief-making.”

BE STRONG AND HAVE FAITH

He urged affected people to be strong and have faith in their country, as he promised to allocate resources to neighbourhoods so that calm and prosperity can soon return.

Rowley said at this difficult period of transition and uncertainty, it is natural that some will have different views on the way forward, but that everyone working for/with Petrotrin must stay committed to operating in the best interest of all the people of TT.

“We appeal for the understanding and support of all contractors and employees (permanent, temporary or casual) at this critical time in the company’s history. “Unnecessary work stoppages and other contrived industrial actions are not in the nation’s best interest. This will only obstruct the already embattled company, and delay this irreversible and unavoidable process geared towards converting a money losing company into a profitable enterprise for the benefit of the entire nation.”

He hoped the implications of such action would be recognised.

“Let us all work together to make the Petrotrin the success it can be. I am confident all persons will place national interest at the forefront and that the re-invented Petrotrin will assume its rightful place in the oil and gas sector of Trinidad and Tobago."

Earlier, Rowley traced the timeline of the recent debate on Petrotrin including the Lashley Report, Petrotrin Board Report and Parliament’s energy committee.

He said now that a decision has been made in line with expert advice, it is disingenuous for anyone to plead a lack of transparency and a suddenness of government action which must be set aside for consultation and parliamentary discussion.

“These calls are nothing but self-serving, stalling tactics and political subterfuge, intended to maintain the status quo, even as the company sinks daily into a deeper quagmire and the whole country’s financial situation becomes more exposed to disastrous downgrade if the Petrotrin problem is not addressed.”

He said Petrotrin is TT’s largest state enterprise, in the industry that is the country’s lifeblood and possessing some of TT’s most prized oil and gas acreage.

“This is a company that is supposed to be one of the major contributors to the national economy. When such an enterprise is losing money to the point where it can’t comply with the law, we have a major problem.” Not only has Petrotrin not been paying its taxes and royalties to the Government, but it has been collecting sums from companies supposedly to be forwarded to the Ministry of Finance but has ended up retaining them to fund its own operations, illegally.

Saying Petrotrin is a drain on the Ministry of Finance, to the detriment of funding education, health and national security, the PM said, “So you see fellow citizens this is not just a Petrotrin issue. We are all in this together. We have all been paying towards the losses and debt that I mentioned. We are all paying to keep the bad situation going and we will all benefit when we fix it.”

DRASTIC ACTION NEEDED

Speaking with a mix of sadness and resolve, Rowley said the closure may seem drastic but Petrotrin needs drastic action.

While Petrotrin has long needed an intervention, past decision makers had shied away due to the negative responses that were sure to follow any corrective action.

“In short, the Petrotrin fix was always seen to be bad for politics and even one’s political survival but we have arrived at a place now where its ongoing failure threatens the national survival.

“Such is my lot.”

Relating the MP’s oath to act “without fear or favour”, the PM said the Government does not have the luxury of ignoring this age-old problem. “Time is not on our side.

“To those whose knee jerk reaction to this very real crisis is to threaten chaos, to burn down the country, to spew invectives, to demonise and toss insults, none of this assists in addressing the issue in any meaningful way.”

Rowley said TT had not always had a refinery and a Petrotrin.

He said Petrotrin, if left as it is, would need a $25 billion cash injection just to stay alive, but which no financier would ever give. Petrotrin now loses $2 billion a year, atop is $11 billion indebtedness. The refinery would need $7 billion just for a chance to break even, but needing big staff cuts, better efficiency and new facilities that are impossible to finance.

The PM said other Caribbean refineries had long ago shut, namely in Curacao, Aruba and St Croix, even as Pointe-a-Pierre’s refining capacity of 140,000 barrels per day (bpd) relies on 100,000 bpd on imported crude oil.

Rowley said Petrotrin had failed to meet initial expectations including in its gross mismanagement of projects involving huge cost overruns and lengthy delays. These included the Gasoline Optimisation Programme whose cost rose from $2.45 billion to $12.6 billion, the failed Gas To Liquids Project that rose from $1.55 billion to $3.15 billion and the failed Ultra Low Sulphur Diesel Project that went from $791 million to $2.89 billion.

Rowley otherwise boasted of the recent deal signed for a gas-supply from Venezuela’s Dragon Field. “It gives us some potential to grow in the medium term and diversify our gas supply base even as it almost immediately adds to the pool of what is available for current needs. We’ve done it! “Our gas industry and our future in this business that is so critical to our well-being, whilst not perfect yet, is in much better shape than it was three years ago.”