[UPDATED] Govt rejects OWTU-led Patriotic's offer for refinery

Government has rejected the final proposal from Patriotic Energies and Technologies Co Ltd for the Petrotrin refinery.

“Today, I regret to say that this final proposal does not address the outstanding issues that could lead to a contractual sign agreement, and that is the state of play as we speak,” said Minister of Energy and Energy Industries, Franklin Khan.

“The government is committed to restarting the refinery with private capital injection mindful that it restarts and has significant and positive impacts on the economy, GDP, and unemployment and will move expeditiously to do so.”

Khan made the comments during a virtual press conference hosted by the Ministry of Energy and Energy Industries on Saturday on the status of negotiations with Patriotic Energies which is owned by the Oilfield Workers’ Trade Union (OWTU). Also present at the briefing were Paria Fuel Trading’s general manager, terminal and trading, Mushtaq Mohammed, chair of the Guaracara evaluation committee Vishnu Dhanpaul and Andre Jeffers, group treasury lead of Trinidad Petroleum Holdings Ltd. The OWTU issued a release saying its president general, Ancel Roget, will respond to the minister’s statement at a press conference scheduled for 10 am on Sunday.

However, the political leader of the MSJ and former OWTU general secretary, David Abdulah, expressed his displeasure over the rejection. He said he is looking forward to the union informing the country about the truth about the situation.

“Not selling the refinery to Patriotic is the second major economic crime by the Keith Rowley-government. The first economic crime was closing down Petrotrin and sending home the workers,” Abdulah told Sunday Newsday. He declined to comment further saying he did not have all the facts.

The minister recalled that in October 2018, the government decided to restructure Petrotrin into subsidiaries including Heritage Petroleum, Paria Fuel Trading, Guaracara Refining and Petrotrin.

On May 21, 2019, the Guaracara and Paria assets went out for public tender to five short-listed bidders, including Patriotic Energies. Patriotic and two others, Klesh and Beowulf, submitted bids, Khan said.

In mid-June 2019, the Cabinet appointed an evaluation team headed by Dhanpaul, the permanent secretary in the Ministry of Finance. On September 20, 2019, Finance Minister Colm Imbert announced in Parliament that Patriotic was the preferred bidder and had offered an upfront payment of US$700 million for the refinery, plus US$300 million got its non-core assets.

“From the onset, this was and has been a very complex negotiation because we were attempting to sell a complex asset involving the sale of a multibillion-dollar state asset,” Khan said. “As such, due diligence by the state was paramount in this exercise. These discussions are subjected to non-disclosure agreements. So, both parties are bound to keep those agreements.”

He said some of the key issues in the negotiations related to a detailed inspection of the refinery, the refinery start criteria, environmental matters, statutory approvals, and taxation matters.

“However, after prolonged negotiations, the three key issues at the end turned out to be the purchase price financing, the restart financing and issue of the first priority lien on the assets,” Khan said.

He said after negotiations and exchanges of letters and a series of meetings with the negotiating team, the Prime Minister and the Finance Minister gave the parties the October 31 deadline to reach an agreement on the assets’ sale.

Patriotic, cognisant of the key outstanding issues, made a final proposal on October 29, ahead of the deadline.

On Friday, a release from OWTU said Patriotic “earnestly” hoped that the proposal would have led to the swift completion of the acquisition process, paving the way to the reopening of the refinery in the interest of the people of TT.

Asked about the process from now on, Khan said the government would consider all option and inform the country on what these were in “shortest possible time”.

“We will have some discussion among the Cabinet to find out what these options are, and the population will be informed when we have greater clarity on this matter,” he said. At this year’s Labour Day celebrations on June 19 at Fyzabad, Roget bashed the government for closing the refinery. He also threw jabs at the Opposition and the business community accusing them of failing to assist the OWTU to prevent the closure.

Roget had hoped for a signed agreement saying recently that the OWTU already had plans in place once the deal was finalised. He anticipated the creation of over 4,500 jobs and the injection of foreign exchange into the economy.

On Saturday, Khan also commented on the recent evictions of residents from bungalows at Clifton Hill in Point Fortin. Khan charged that the occupants had no authorisation to stay there.

He insisted that the bungalows and lands belong to Petrotrin and the occupants were there illegally.

“These bungalows are Petrotrin’s. They were Trintoc and Shell bungalows. The transfers of those assets occurred over the decades. There are absolutely no legal issues there,” Khan said.

Many of the evicted families said they were not squatting and showed documents purporting to be from a landlord who claimed to have owned the properties. The man is assisting police.

This story has been updated with additional details. The original story is published below.

Government has rejected the final proposal from Patriotic Energies and Technologies Co Ltd for the Petrotrin refinery.

"Today, I regret to say that this final proposal does not address the outstanding issues that could lead to a contractual sign agreement, and that is the state of play as we speak," said Minister of Energy and Energy Industries, Franklin Khan.

"The government is committed to restarting the refinery with private capital injection mindful that it restarts and has significant and positive impacts on the economy, GDP, and unemployment and will move expeditiously to do so."

Khan made the comments during a virtual press conference hosted by the Ministry of Energy and Energy Industries on Saturday on the status of negotiations with Patriotic Energies.

The minister recalled that in October 2018, government decided to restructure Petrotrin. The company was broken into subsidiaries, including Heritage, Paria Fuel Trading, Guaracara Refining and Petrotrin.

On May 21, 2019, Guaracara and Paria assets went to five short-listed bidders, including Patriotic Energies which is owned by the Oilfield Workers Trade Union, led by president general Ancel Roget.

"From the onset, this was and has been a very complex negotiation because we were attempting to sell a complex assets involving the sale of a multibillion-dollar state asset," he said.

Khan said some of the key issues in the negotiations related to a detailed inspection of the refinery, environmental matters, statutory approvals, and taxation matters.

"However, after prolonged negotiations, the key issues at the end turned out to be the purchase price financing, the restart financing and issue of the first priority lien on the assets," Khan said.