Quamina: TPHL on good financial footing

TRINIDAD Petroleum Holdings Ltd (TPHL) chairman Michael Quamina, SC, says the company is on a good financial footing.

He was addressing members of the Parliament's Public Accounts Enterprises Committee (PAEC) on April 17.

The PAEC was holding a public inquiry into the company's audited financial statements for the year ended September 30, 2019.

TPHL was formed on November 30, 2018, when former state oil company Petrotrin was restructured.

The company comprises four subsidiary entities – Heritage Petroleum, Paria Fuel Trading Company, Guaracara Refining Company (GRC) and Petrotrin.

Quamina gave PAEC members some details about the formation of TPHL.

"The oversight capacity of TPHL (over its four subsidiaries) is fortified by having TPHL directors sit on the boards of the subsidiary companies and sub-committees, including finance and investment, audit and risk, operations and safety, procurement and tenders, so as to better monitor performance, governance, compliance as/when necessary."

While TPHL oversees major management decisions of its facilities, Quamina said, "It does not actively participate in the day-to-day running of the various operations (of its subsidiaries)."

Heritage is involved in oil exploration and production. Paria is involved in the distribution of fuel. GRC's responsibility involves the management of Petrotrin's assets, such as its Pointe-a-Pierre refinery, which was closed on November 30, 2018.

Quamina told PAEC members under the TPHL framework, Petrotrin exists as "a non-operational entity and deals in non-core assets and treats with legacy Petrotrin liabilities.

The goal of TPHL's board, he continued "was to transform an entity (Petrotrin) that was making substantial losses and accumulated billions of dollars in debt into substantially and profitable business with free, positive cash flow."

Quamina said, "I dare to say that this has been accomplished, as of today's date, of a revenue of over $36 billion."

He added that TPHL has paid $12 billion in taxes to the State and reported a net profit of "about $5.2 billion."

Quamina told PAEC members a review of the TPHL's organisational structure will take place later this year. He said one of the reasons for this was the change in status of Paria in 2021, from an asset held for sale to a profit-making entity.

He identified the status of any outstanding Petrotrin legacy issues and the possible sale, lease or operatorship of the refinery as other reasons to review TPHL's structure.

Quamina said the refinery is being preserved by methods "which are based on international best practice, the Shell-design-engineering practice for the preservation of idle hydrocarbon assets."

He reiterated that TPHL's financial performance has been good since its inception.

Quamina said Heritage and Paria have recently reported profitable results of $4.4 billion and $103 million respectively "while contributing combined $1.2 billion in taxes, royalties and licensed payments to the Government of Trinidad and Tobago."

Port of Spain South MP Keith Scotland asked TPHL officials whether they believed its subsidiary entities Heritage and Paria could be sustainable businesses over the long term.

Heritage CEO Erik Keskula and Paria chairman Newman George both said yes.

Keskula said Trinidad and Tobago's energy sector continues to provide opportunities for exploration and production.

He added that Heritage has taken steps to reduce employees being injured on the job and improve its ability to deal with oil spills.

While acknowledging the comments of Quamina and other TPHL officials, PAEC chairman Wade Mark was concerned that the committee did not have all the company's audit reports. He said such a situation gave rise to the potential for wrongdoing which could go unsanctioned.

Mark added that he was not casting aspersions on any TPHL official.

After listening to comments from Scotland, PAEC vice-chairman Rushton Paray and Government Senator Renuka Sagramsingh-Sooklal, Mark suggested it might be better for the committee to meet separately with TPHL's subsidiary companies to get a better understanding of issues specific to them.