Experts: Has Trinidad and Tobago learnt from Petrotrin's closure?

UNIVERSITY of the West Indies (UWI) economist Dr Marlene Attzs and energy analyst Anthony Paul asked whether TT has learnt any lessons from the closure of state oil company Petrotrin five years later.

They asked these questions during an online symposium hosted by the Oilfields Workers Trade Union (OWTU) on Monday.

Petrotrin was closed on November 30, 2018.

In their respective contributions, Attzs and Paul said that a lack of transparency and accountability in the operations of state enterprises (such as Petrotrin) over several governments' tenures lay at the root of Petrotrin's closure.

Recalling the prominent socio-economic role that Petrotrin once played in the national landscape, Attzs does not believe that TT could allow any similar entity to suffer Petrotrin's fate.

"I don't think that the country would be able to afford another loss of a significant commercial entity like we lost Petrotrin."

Attzs said one of the objectives of Petrotrin was to capitalise on the value of oil and natural gas to benefit the population.

While the company was supposed to do this as a commercial entity, Attzs said it also faced the problem of being state-owned.

She added this posed a challenge for the company as the approach to its governance varied over different five-year cycles, when general elections were held and if the political party in government changed.

Attzs said there was some political interference over time and this may have created a degree of ambiguity as to how Petrotrin was supposed to operate.

"At the heart of it seems to be a governance conundrum."

Referring to a chart, Attzs said from 2012-2022, 50 per cent of all government's expenditures were on transfers and subsidies to state enterprises such as Petrotrin, Caribbean Airlines and the Water and Sewerage Authority (WASA).

The UNC-led People's Partnership coalition and the PNM were in government at different times during this period.

Attzs said it is important, going forward, that the public, not only the decision-makers, understand how state enterprises are managed.

"We, the people, stand to benefit or to lose (depending on how these entities are managed)."

Paul did not believe any objective study was done to clearly say why Petrotrin was closed.

As someone who was associated with the company in different ways throughout his career, Paul believed the former company still had value to TT.

"My sense is that Petrotrin has valuable assets above and below the ground."

On the latter, Paul said at least 900 million barrels of heavy oil were in Petrotrin's Trinmar's onshore jurisdiction.

On the former, he said Petrotrin provided employment opportunities for many young people in the energy sector when it was operating.

Paul said poor management over time may be what led to its closure.

He said a company's management was chosen by its board of directors.

Paul asked, "Who selects the board?"

He said all state enterprises do not seem to have clear systems for transparency and accountability for management, boards or the people who select boards.

Recalling Petrotrin provided the local and regional market with petroleum products, Paul said, "We had security of supplies."

He added this is not the case today.

Paul said if government felt Petrotrin still had some value despite its challenges, closing it was not the right option.

He added that the company could have remained in operation while efforts were made to find an investor.

Paul said this strategy could have involved either Petrotrin partnering with an entity with better management skills or divesting parts of its operations to other companies, which could make those operations profitable.