Here are a few Petrotrin facts, Roget

THE EDITOR: On the fifth anniversary of the closure of Petrotrin, Ancel Roget, president general of the Oilfields Workers' Trade Union (OWTU), invited members of his “blue shirt army” to assemble at the Pointe-a-Pierre roundabout to express his “disappointment and anger” over the closure of Petrotin, and to bad-talk the PNM government.

On the second point, the PNM need not feel special because Roget bad-talks whoever is in government. He also has nothing good to say about the private sector, multinationals, or anyone interested in profit.

On the first point, Comrade Roget has every right to be angry. The closure of Petrotrin cut the OWTU’s membership by more than 3,000 and, consequently, reduced the union’s annual income by close to $6 million. Ouch! But that’s what you get for contributing to the bankruptcy of the hand that fed you. The sad truth is that commercial considerations have never made it onto the OWTU’s agenda.

In 2017, in the face of an untenable debt position, rapidly declining oil production, and out-of-control costs, Roget and the OWTU demanded from Petrotrin and got a five per cent wage increase, under threat of strike action. This was at a time when overstaffed Petrotrin boasted the highest paid workers in the country, and neither the company nor the country could afford the added expense.

The Pointe-a-Pierre refinery employed 1,700 full-time workers and hundreds of full-time contractors to refine 140,000 barrels of oil a day; similar-size refineries around the world were being operated by less than 400 workers.

Corruption, mismanagement, nepotism, political interference and a basic lack of focus on its core business all contributed to Petrotrin’s demise. Roget likes to point fingers, but the actual truth is that the 2017 wage demand proved to be the final nail in Petrotrin’s coffin.

Here are a few more facts, comrade. When the Government decided, or, more accurately, was forced to finally shut down Petrotrin’s operations on November 30, 2019, the company’s accumulated debt stood in excess of $12 billion. That’s $12,000 million. Petrotrin had not paid taxes in years, and had been borrowing US dollars heavily on the local market to fund its recurrent expenses.

So much so that it had amassed a debt in excess of US$500 million in local borrowings. And, on August 14, 2019, it had to make a balloon bond payment of US$850 million which, quite simply, neither it nor the Government (citizens of TT) had the funds to pay. Had the company’s operations not been shut down and its debt refinanced, TT’s credit rating and the cost of all its borrowings would have been increased.

The exploration and production side of Petrotrin’s business was producing just shy of 40,000 barrels of oil a day, which it gave to the refinery to be refined into various forms of fuel. The refinery, in turn, was importing an additional 100,000 barrels of oil every day, and was refining the 140,000 barrels every day at loss. The refinery was losing money on every barrel it refined. NB, Petrotrin was spending more US dollars than it was earning. In local parlance, the maths was not "mathsing."

From 2011 to 2019, Petrotrin’s financial results were as follows: +$2.4 billion; +$1 billion; +$15 million; -$201 million; -$1.04 billion; -$4.9 billion; -$2.2 billion; -$16.5 million and -$9.3 billion. Plus means profit and minus means loss. During the course of its last five years in operation, Petrotrin lost an average of $6.8 billion annually.

Since the shutdown of the refinery, Heritage Petroleum, the re-established exploration and production (E&P) business, recorded profits of +$1.0 billion in 2020; +$682.7 million in 2021 and +$1.1 billion in 2022.

During the same period, Paria Fuel Trading, the company Roget said has been recording losses, has in fact reported profits of +$109.2 million in 2019; +$231.1 million in 2020; $162.0 million in 2021; and $257.4 million in 2022. Since its inception, Paria has recorded profits totalling US$112.5 million and paid a total of US$82 million in taxes.

All of this information is readily available online on the official TPHL site, and has been verified by accounting firm EY.

Roget is either incapable of reading financial statements, or is purposefully trying to mislead the country. Either, or both, of which is equally worrying.

With average annual losses of close the $7 billion a year during its last five years, the question is: If, as Roget suggests, we, the ultimate owners of Petrotrin, opted to keep it alive for the benefit of the workers, the fence-line communities, sports facilities, etc, from what part of the country’s national budget would we have taken the $6.8 billion every year to continue covering Petrotrin’s losses?

ALLISON CHANG

via e-mail