BPTT officials: Restructuring will make company leaner

The restructuring of British Petroleum (BP) which could see a reduction in staff by up to 25 per cent worldwide, will create a more focused, highly integrated and leaner organisation, said officials of BP.

In a statement issued in June, shortly after announcement of the restructuring was made, BPTT officials said the restructure would be part of the oil and gas giant’s move to reimagine energy and reduce their emissions to the point where they become a net zero company by 2050.

BPTT admitted that the restructure was also prompted by the decline in oil prices.

On Monday, officials at BPTT said the process to determine who would be cut was expected to be completed by the end of 2020.

“By that time the new structure will be in place and staff would have been notified,” officials said.

“Our sanctioned investments and projects in Trinidad will continue as planned and we remain committed to efficiently developing our gas resources while exploring opportunities to decarbonise gas value chains and develop new low-carbon businesses. We look forward to opportunities to partner with industry and the country to support Trinidad and Tobago’s energy future,” BPTT added in their June 8 release.

Former Energy Minister, Kevin Ramnarine said TT has been in difficult times before and have come out of them and the staff cuts were no surprise to him, since BPTT has seen low profits before tax over the past five years.

However, he said these are unprecedented times, as there is no real indication when the restrictions implemented to combat the spread of covid19 (which has significantly reduced the demand for oil and gas) will be lifted, or when a vaccine will be developed.

“I would have put in place a package of fiscal incentives to keep the oil and gas value chain viable in these difficult times. In addition it’s clear that the NGC has to consider reducing the price it sells natural gas to plants in Point Lisas,” Ramnarine said.

He added that BP and Shell’s move to become net zero companies by 2050, though gradual, would have serious implications for TT’s economy.

“There will be a gradual transition in the way they do business. It will make the competition for capital expenditure more intense as oil and gas projects compete with renewable energy projects.”

But economist Roger Hosein says there is no need for government to intervene in the reorganisation of the company, in fact he suggested that government encourage those workers, who would now be equipped with a wealth of experience from BPTT, to set up small businesses to supply the rest of the energy sector.

“What we are seeing, though, is the future of the energy sector in TT’s economy starting to unfold,” Hosein said. “Firms will start to downsize as renewable energy takes greater precedence in different markets. We have to adapt to these changing economic conditions.”

But the move to reduce staff is not something that should be ignored by government, Hosein said.

He warned that any cut in the volume of production could impact our export revenues, and given the state of the economy, even before the spread of covid19, government would want to take this into consideration as it plans for the next five years and in the shorter term, when the budget is read on October 5.

“We need to take all necessary action to strengthen the non-energy export part of the economy to ensure that we have sufficient foreign exchange in time to come.”