N Touch
Thursday 17 October 2019
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Editorial

A patriotic sale

THE GOVERNMENT’S decision to designate the Oilfield Workers Trade Union (OWTU) the preferred choice in relation to the sale of Petrotrin assets represents a victory, challenge, and opportunity for the trade union movement. While there are many questions to be answered, the Government’s move undoubtedly represents a seismic shift: show of confidence in workers. It also manages to keep Petrotrin’s assets within local hands. All of this is to be welcomed.

To some extent, the dye is yet to be cast as crucial details of the Patriotic Energies and Technologies Co Ltd sale are to be spelled out. This includes confirmation of the OWTU company’s ability to make the billion-dollar purchase; a draft sales and purchase agreement alongside various other commercial agreements such as crude handling, domestic fuel supply, natural gas supply, product offtake, and transition support; a business plan; a statement of fiscal incentives or tax concessions required; an approach to historic environmental liabilities; a refinery start-up plan; a plan for the supply of petroleum products during the transition to full operation; among other things. These are important details.

Meanwhile, the Government’s clear signal that the OWTU is the preferred bidder over entities from the US and Switzerland is something of a salve given the turbulence of the last nine months which saw workers retrenched when refining operations were shut down. A major question relates to the proposed staffing plan and whether all workers will be re-employed. Asked if all the workers who were retrenched will be rehired, OWTU president general Ancel 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.”

For now, the OWTU should be congratulated for what must have been an impressive presentation to the Cabinet. The entity has offered US$700 million in consideration upfront.

Once the sale is finalised it will be in the country’s interest for the OWTU to succeed in this novel endeavour. While we welcome the fact that the assets will remain in local hands, it is important for the new dispensation to remain open to foreign expertise where appropriate.

Arguably, this transaction places the burden on the trade union movement to make these assets work. That burden will be a heavy one in light of a long history of enormous debts and questionable management as well as major environmental disasters.

The issue of where the initial upfront payment will come from is a serious one, although the government’s announcement is something of an informal guarantee that financing could be easier to secure. 

How much revenue will be diverted to the Treasury is another major question. Will the initial moratorium, vital for a fresh start, pay off in the long run? 

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