N Touch
Thursday 17 October 2019
follow us
News

[UPDATED] OWTU US$700M DEAL

Govt sells refinery to trade union

WE HAVE OVERCOME: OWTU president general Ancel Roget, centre, said the union’s purchase of the Pointe-a-Pierre refinrey will benefit the entire nation.
WE HAVE OVERCOME: OWTU president general Ancel Roget, centre, said the union’s purchase of the Pointe-a-Pierre refinrey will benefit the entire nation.

THE Oilfield Workers Trade Union (OWTU) has won the bid for the Pointe-a-Pierre refinery with a US$700 million offer which Government has accepted, Finance Minister Colm Imbert announced yesterday.

The former Petrotrin refinery operations – now called Guaracara Refining Co Ltd – was sold to Patriotic Energies and Technologies Co Ltd, which is wholly owned by the OWTU.

Imbert made the announcement in Parliament saying Government saw Patriotic as the most suitable buyer over Beowulf Energy of the US and the Klesch Group which is based in Switzerland.

The minister said from the results for the request for proposals for the sale of the refinery, Patriotic was the only bidder that offered an upfront consideration of US$700 million. Beowulf offered a US$42,000 lease per month over a 15-year term and the Klesch proposal indicated the only payment to Government would be through taxes.

Moments the announcement, OWTU president general Ancel Roget said Patriotic’s successful bid was a blessing for TT and if another company had acquired the refinery, the country would not have benefited.

“We would have struggled, we would have prayed, we would have fasted, and at the end of the day, Almighty God would have showered blessings on us, not just us, but on the people of TT. The people of TT certainly deserve a lot more.”

The refinery’s assets were placed under Guaracara, after the state-owned oil company Petrotrin was closed, last year, which left an estimated 5,000 workers jobless.

REFINERY FOR TT’S BENEFIT

Asked if he will rehire all of the workers who were retrenched, Roget said: “All of the workers who were in support of the union for the acquisition of those assets, those workers will not be disappointed.”

Roget said the first order of business will be a national prayer thanksgiving service, stressing that the purchase of the refinery was for the country’s benefit.

“It is not just for the OWTU members, it is for the OWTU members, that is a fact. But, it is also for the people of TT,” he told reporters in Point Fortin during an election campaign walk for the Movement for Social Justice.

“We are going to ensure that the acquisition of those assets do not go in vain, but go for the benefit of every single citizen that walks this land. The acquisition of those assets is not a gift from the Government. We did not get any gratis or did us any favour. The people deserve it.”

He said they are awaiting a formal document from the Government stating the terms of the acquisition.

Patriotic was given one month to present to the evaluation committee a “satisfactory and comprehensive work plan” on how it intends to complete the process.

The evaluation committee will submit the findings to Cabinet within six weeks.

Patriotic was formed a year ago and on December 17, the union focused on the process of incorporating the company for the acquisition of the refinery.

PATRIOTIC MUST ACT

Patriotic now has a few weeks to present a draft sales and purchase agreement and other commercial agreements, inclusive of crude handling, domestic fuel supply, natural gas supply, product off take and transition support, a business plan and a statement of fiscal incentives or tax concessions.

They must also provide a refinery start-up plan, a suitable staffing plan, proof of qualification and an approach to any historical environmental liabilities. Confirmation of its ability to finance the purchase of the finery must also be submitted along with approval from the Patriotic board of directors.

Government granted Patriotic a three-year moratorium on all payments of principal and interest towards the purchase of the refinery and a further 10 years, at a fair market interest rate, to complete the payment.

According to Imbert, Government saw Patriotic as the most suitable buyer over Beowulf and Klesch.

As part of its proposal, Beowulf offered a 50/50 profit sharing option contingent on “recovering its capital investment and achieving a 15 per cent internal rate of return.”

In its proposal, Patriotic offered a further US$300 million for the non-core assets of legacy Petrotrin – core assets were not offered for sale. The company highlighted job creation and proposed incentive staff through profit and submitted a reasonable mark-up of the sale of purchase agreement. The proposal also included the introduction to staff incentives through a performance-based framework and a commitment to improving work ethics. Seventy-seven bidders made offers in the first stage of the process. This was short-listed to 25 bidders, then, in another review, the bidders were short-listed to eight who were then invited to submit non-binding offers.

In June, Cabinet appointed an evaluation committee to make a recommendation to Cabinet of the preferred bidder, to negotiate and finalise a bidding offer, settle a definite agreement and negotiate any government incentives whilst conducting environmental audits.

Before the bid was closed on August 20, three bidders submitted their final binding offers. The evaluation committee reviewed the proposals on 12 criteria of financial capabilities to history refining and marketing experience, proposed crude slate, exclusivity period, lease/sale aspects, union involvement, social and economic and approximate time for the restart of preparation for ultra-low sulphur diesel.

This story was originally published with the title "OWTU wins Pointe-a-Pierre refinery with US$700m bid" and has been adjusted to include additional details. See original post below.


THE Oilfield Workers Trade Union (OWTU) has won the bid for the Pointe-a-Pierre refinery with a US$700 million offer which Government has accepted, Finance Minister Colm Imbert announced this afternoon.

The former Petrotrin refinery operations – now called Guaracara Refining Company Ltd– was sold to Patriotic Energies and Technologies Co Ltd, which is wholly-owned by the OWTU.

Imbert made the announcement in Parliament saying Government saw Patriotic as the most suitable buyer over Beowulf Energy and a third company, Klesch.

Imbert said from the results for the request for proposals for the sale of the refinery, Patriotic was the only bidder that offered an upfront consideration of US$700 million. Beowulf offered a US$42 million lease per month over a 15-year term and the Klesch proposal indicated the only payment to Government would be through taxes.

Today's Most Popular
Comments

Reply to "[UPDATED] OWTU US$700M DEAL"

News