N Touch
Saturday 20 April 2019
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Letters to the Editor

Good time to save Petrotrin

THE EDITOR: The prospects for successfully reinvesting Petrotrin’s assets at this time seem to be very good. The price of oil is buoyant and there could be eventful rallies.

For the US-dollar denominated investor, the continuing strong-dollar policy of the US Treasury means the buy-in right now into this project will be cheaper than later when the US dollar has fallen.

Alternatively, the situation is wide open for an investor consortium from the newly emerging Russia-China currency bloc.

The interest rates environment means that the old debt can still be restructured in a most favourable manner; whereas it is likely that when the US dollar has weakened rates will have jumped already.

The overall context of today suggests Petrotrin’s assets’ valuation possibilities relative to new investment could end up worse off if reinvestment is delayed.

The new project will require both fixed and variable amounts of crude so that the new investor consortium will include new drillers and shippers. Thus old “legacy” investors can still be forced to face competitive bidding and our nation can reclaim taxation and pricing mechanisms.

As the PNM cannot be sure of what will happen in the next election, it is in the best position to construct the set-up at short notice, impartially and advantageously. Upgrade and environment costs and formatting can be built into the projections. Is new union leadership needed?

E GALY via e-mail

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