Chairman: $500,000 a month to preserve mothballed refinery

APPROXIMATELY $500,000 a month is being spent to preserve the former Petrotrin refinery at Pointe-a-Pierre.

Guaracara Refining Company (GRC) chairman Newman George gave this response to a question from Public Accounts Enterprise Committee (PAEC) vice-chairman Mayaro MP Rushton Paray, during a public inquiry held by the PAEC on April 17.

The meeting was held to examine the audited financial statements of Trinidad Petroleum Holdings Ltd (TPHL) for the year ended September 30, 2019

GRC is one of four subsidiary companies under TPHL and its main function is to manage the physical assets of Petrotrin, such as the refinery.

Petrotrin was restructured into TPHL on November 30, 2018. The refinery was closed on the same date.

Paray asked George if the cost of preserving the refinery was in US or TT dollars.

George replied, "I speak in TT (dollars)."

Paray observed that unlike two other TPHL subsidiaries, Heritage Petroleum and Paria Fuel Trading Company, GRC was not classified as a revenue-earning entity in the group. He asked where GRC was obtaining funds to preserve the refinery.

George said this revenue was coming from lease agreements that GRC has with Heritage and Paria for storage facilities.

Paray asked if the cost of preserving the refinery was an incentive for TPHL to find someone to operate it.

TPHL chairman Michael Quamina, SC, said, "There is no greater driving force in so far as in trying to get somebody to take it off our hands."

He added that outside the cost of preserving the refinery, "There are driving forces even more significant than that would want us to get somebody to take it over."

Quamina said the Houston-based branch of the Bank of Nova Scotia was serving as consultants to TPHL with respect to assessing potential bidders for the refinery.

"We went through a very formal process some time ago. I would think this is the most progress that we have made. We do have some prospects in hand."

Paray asked how many bidders TPHL was considering.

Paria general manager Mushtaq Mohammed said, "Currently we have had eight expressions of interest (EOIs) for the purchase, lease or restart of the refinery."

Mohammed added all eight EOIs were unsolicited proposals.

He said TPHL expects the eight entities to submit formal offers by May 10, and those offers will then be reviewed and a decision made in due course.

Paray asked, "In terms of those bidders, can you share how many may be local or a combination of foreign and local?"

Mohammed replied, "I would say at this time, all of them have a composition of local and foreign participation."

No details were provided of the identities of any of the entities interested in the refinery.

At the launch of an apprenticeship programme by the Youth Development and National Service Ministry in Santa Flora last month, the Prime Minister said two parties were currently interested in the refinery, but it was not yet a sealed deal.

“One looks very promising, one looks very interested. But until the horse begins to drink the water, you don’t know what’s happened at the river.”