PM: Petrotrin refinery negotiations done by month-end

The Prime Minister has announced that by the end of this month, negotiations for bids for the Petrotrin refinery are expected to be completed, and hopefully, shortly after, an announcement will be made of the selected company.

Dr Rowley delivered the keynote address at the TT Energy Conference 2025 opening at the Hyatt Regency Hotel and Conference Centre in Port of Spain on February 10.

He said initial bids for the refinery in Guaracara were found to be less than satisfactory and later aborted.

After reviewing its criteria, expressions of interest were re-invited for the sale or lease of the refinery and its ancillary assets.

Rowley said, “The expressions of interest were evaluated by an evaluation committee comprising industry professionals from whose recommendation three companies were shortlisted.

“The next phase of the process comprises the submission by the companies of firm proposals and negotiations with the evaluation committee for the selection of the most suitable company. It is anticipated that the negotiations will be completed before the end of February 2025.”

The refinery was shut down in November 2018.

After the closure, several entities expressed interest in acquiring or operating the refinery. Those included Patriotic Energies, owned by the Oilfield Workers’ Trade Union and unnamed international investors.

Rowley explained why the refinery was closed and Petrtorin was restructured.

He charged that its production levels in its mature fields were plummeting.

“It was overburdened by huge, accumulated debts, and the most favourable forecasts were for ongoing billion-dollar losses, in an environment where the national treasury could not assist further without great peril to the whole economy.

“Based on the advice of the then board of directors and a government-appointed technical committee, the company was restructured into separate business units, and the refinery was put up for sale or lease as the Government continued to keep and service upwards of US$450 million of Petrotrin debt.”

Prime Minister said the restructuring was a success, citing the performance of the operating companies, Heritage Petroleum Company Ltd and Paria Fuel Trading Company.

“From its inception, Heritage has been profitable, with annual net profits in excess of $1 billion for most of its short history. Its success has enabled the company to contribute $ 7.75 billion towards debt service of the TPHL Group over the period commencing 2019-June 30, 2024.

“Additionally, from inception to date, Heritage has paid $13.33 billion in taxes and other payments to Government. Simply by changing the business model from importing and refining crude to one of producing and selling unrefined oil, we have moved our bottom line from dangerous chronic losses to solid profitability.”

Rowley said similarly, Paria had maintained profitability through effective cost-management measures, operational efficiencies, favourable market prices, and expanding bunkering business.

“The government has been the recipient of corporation tax and green fund levy of $1.2 billion, from Paria, since the start-up of operations on December 1, 2018, up to September 30, 2024.”

Beyond the refinery, Rowley said the government had focused on revitalising the other elements of the domestic energy sector, particularly on the upstream sector.

“Although confidence had been restored in the industry, inertia still existed,” he said.

He recalled that on March 14, 2018, at the Spotlight on Energy forum, the government outlined its strategies to address gas-related issues and to put the industry on a sustainable path, which included engaging major energy stakeholders.

“Through such engagement, there has been a renewed commitment by companies to deepen their investment in the domestic energy sector,” he said.

“Investment in the energy sector, which slowed due to the covid pandemic, is projected at a healthy US$10.2 billion over the period 2024 to 2027 as compared to approximately US$6.0 billion for the preceding four years.”

Rowley said the industry had regained momentum with a suite of exploration and development activities onshore, in shallow water and in deep water, taking place concurrently.

Rowley added: “It is anticipated that the increase in upstream activity will arrest the decline and significantly improve oil and gas production.”