Small: New oil firm a cash-cow

INDEPENDENT Senator David Small said the export of crude oil plus the import and partial re-selling of refined product were both very viable businesses, as he praised the prospects of the firms succeeding State-run Petrotrin. He spoke in Friday’s) Senate budget debate.

While some critics had said Petrotrin’s crude-oil is too “sour” or high in sulphur content to attract many refiners, Small retorted that this is not at all an issue. “It could be the worst quality, you put out the tenders you will get a price. There’s no issue there. Anybody who says anything like that has no experience in the market.”

Small said the export of 40,000 barrels of oil per day at a presumed oil-price of US$55 per barrel would net TT a handsome US$5.64 billion a year in revenues.

“It looks like very profitable business. This is a winner. It could work if run efficiently.” Petrotrin’s exploration and production arm has passed on to a firm named Heritage Petroleum.

Likewise Small hailed the prospects for the import and re-sale of refined product. “It’s a cash cow.” He said such terminal operations are easy to run and make money everywhere in the world. This role is being done by a new firm named Paria Fuel Trading Company.

Small surmised, “These two things seem very sound.”

He mulled aloud whether the country would have still enjoyed fairly recent gas-finds by foreign firms if the former government had not awarded them tax-incentives. “I say yes,” Small said.

He said these firms had already been in TT and had contractual obligations, both which he saw as sufficient incentives without the need for tax-breaks. Small said TT represents 17 per cent of production for one major oil-firm (bpTT), which he said was therefore vulnerable to pressure in negotiations with public servants.

Despite his views on business viability, Small expressed sympathy for workers retrenched from Petrotrin, saying that for them the company’s closure was “a universe-shattering event.” He said that as a family man with children to send to school and a mortgage to pay, he had once lost his job, but had overcome. “It was tough for me, a unique challenge but not insurmountable.”

Small viewed the gasoline subsidy as “a distortion in the system.” He said some local manufacturers are “getting virtually free natural gas.”

Saying TT has the cheapest electricity in the western hemisphere, he said in Barbados it costs consumers seven times the TT price. “Do we realise how long we have had it so good?”