TRINIDAD OIL IN DECLINE – By Bert Wilkinson – Caribbean Life News

TRINIDAD OIL IN DECLINE

Trinidad

– By Bert Wilkinson – Caribbean Life News NY – September 20, 2018

Trinidad’s Prime Minister Keith Rowley flew to Guyana for two days at mid-week with official pronouncements indicating the two will sign a pact relating to energy, agriculture and other issues but speculation was rife that the visitors might well make a pitch to refine some of Guyana’s oil there, thereby preventing a large and lifeline refinery from closing in Trinidad.

Rowley and Guyana’s President David Granger signed the memorandum of understanding at midday on Wednesday as controversy swirled in Trinidad over the impending closure of the Petrotrin Refinery in South Trinidad and the loss of jobs of more than 4,000 workers. Original figures had put the job losses level at about 2,000 but cabinet ministers and top Petrotrin officials are now admitting that the final figure will double original estimates.   

Critics say that the plans to close the underperforming, money-losing refinery will devastate the economy of the so-called South in Trinidad as thousands of families depend on its existence directly and indirectly.

Oil production, led by a consortium by global oil major ExxonMobil, is scheduled to begin in late 2019 or early 2020 following the discovery of “world class deposits” offshore Guyana in 2015. Exxon has since drilled 11 commercial wells with nine yielding large deposits of sweet, light crude. The company now boasts that the Guyana strike rate ratio of successful wells is the highest anywhere in the world in living memory and bodes well for the future. “We are not going anywhere. We will be here for decades,” said company spokeswoman Kimberly Brasingtom.

Guyanese officials are yet to pronounce on if and where Guyana would refine its portion of oil production or sell raw crude in the open markets so added significance has been pinned to PM Rowley’s visit in the wake of calls by Opposition Leader Kamla Persad-Bissessar and others in Trinidad for Guyana to save the Petrotrin Refinery by refining its oil.

Guyana shares decades of close relations with the twin island republic, with Trinidad and Tobago writing off more than $120 million in debts to Guyana more than a decade ago under favorable Paris Club forgiveness terms. Some at home think it is Guyana’s term to help Trinidad. Others say that decades of boasting and bragging about the twin island’s economic prosperity are coming to an end with oil production there at only 40,000 barrels per day, while Guyana is planning to reach 750,000 by the first five years of production. Trinidad should be made to suffer alone they argue. The Guyanese offshore oil fields are about the third of the way in open waters to Trinidad.

As Rowley engages in talks with Granger and other Guyanese officials, he did tell the powerful Oilfield Workers Trade Union (OTWU) that authorities would seriously consider any serious offer for a worker-led buyout and operation of the refinery to save jobs and the economy of the area. Trinidad has been forced to spend millions in foreign exchange earnings to import 100,000 barrels of oil daily to keep the refinery open as local production has dwindled to a mere dribble.

Rowley told President Ancel Roget that cabinet will approve the sale of the refinery to new owners once the buyers accept full responsibility for and are willing to “present and commit to the rigors of an acceptable business proposal” even as he warned that if “more attractive offer comes up,” authorities will jump at it.

He said authorities had undertaken “the very difficult decision to close the refinery,” and suggested that the refinery will be separated from other businesses of the company to make it viable then as a “stand alone, as an asset for which a future of some sort would have to be designed.”

Trinidadian officials say the question of refining Guyana’s oil will come up as other companies with offshore concessions are highly likely to find commercial quantities of oil and gas in the coming months in a basin that the US Geological commission says contains billions of barrels of untapped, virgin fields.

Just recently, Exxon said that a third drill ship will arrive in Guyana in mid-October and it may be forced to order up to five huge floating production and storage ships that will sit near drill rigs to store oil heading to international markets, an indication of the quantity of oil it will have access to in the near future.

See also: 

Trinidad’s state-run Petrotrin to cease oil refining operations – Reuters

PORT OF SPAIN, Trinidad (Reuters) – Trinidad and Tobago’s Petrotrin beginning in October will halt refining operations due to recurring losses from costly crude imports over the last five years, the state-run oil firm said on Tuesday.

Many of the Caribbean region’s state-owned refineries have struggled in recent years as rising crude prices and high operating expenses cannot be fully recouped from fuel sales to consumers.

Petrotrin currently produces 40,000 barrels per day (bpd) of crude, while its refinery operates at a capacity of 140,000 bpd, which requires the crude supplies to be imported.

“We have to go to the market to buy about 100,000 barrels of oil (per day) to make up the shortfall. This results in a net loss in foreign exchange,” Petrotrin Chairman Wilfred Espinet said in a statement.

Petrotrin requires a cash injection of nearly $4 billion to remain in operation, upgrade its infrastructure and repay its debt. The firm has lost over $1 billion in the last five years and racked up nearly $2 billion in debt.

It also owes the government about $500 million in taxes and royalties.

Shutting the refinery is expected to affect 2,600 permanent jobs, including 1,700 direct jobs at the facility, Petrotrin said.

To provide for the Caribbean archipelago’s gasoline, diesel and aviation fuels needs, Petrotrin plans to import 25,000 barrels of oil equivalent per day. Any crude produced will be exported, it said.

**  Reporting by Linda Hutchinson, writing by Marianna Parraga, editing by G Crosse
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Comments

  • Rosaliene Bacchus  On September 23, 2018 at 3:18 pm

    Times are a’changing in the Caribbean Region. Oh, what a little oil can do to the rise and fall of national egos!

  • guyaneseonline  On September 24, 2018 at 3:05 am

    Letter: Petrotrin: Lies… damned lies
    September 23, 2018 – Letter by Gerry Kangalee
    Dear Sir:

    “On an individual level this asks us to always consider our choices and actions in light of the impact it will have on our families, communities and the entire nation.” ~ Keith Rowley

    Even for the successors to O’Halloran and Boysie Prevatt, this bunch of political hustlers and confidence tricksters; these front men for the billionaires who treat public funds as theirs to be pilfered, looted and plundered, the present administration take the cake for their duplicity, dishonesty, mendacity and venality.

    Their justifications for destroying Petrotrin changed from day to day. They are attempting to keep the population on the back foot with their misinformation, disinformation and skewed statistics. In other words they are trying to baffle us with gobar. Writer/poet/oil worker Tony Bedassie, quite rightly, characterised their propaganda assault as The Art of Deception.

    They pluck figures out of the air. They say it was 1,700 workers to go while some 2,600 others would be impacted, whatever that means. All kinds of figures keep popping up from nowhere. They talk about permanent jobs being affected. They are not talking about the temporary and casual workers who will be thrown onto the pavement in addition to thousands of contractor workers and workers who work for the suppliers and service providers who depend on the refinery for their survival.

    This is not about 1,700 jobs as they were trying to make us believe. This is going to affect thousands of gainfully employed people in the South. In turn the loss of these jobs is going to devastate small and medium retail business like stores, hardware, food vendors, market vendors, pubs, restaurants, pharmacies, groceries, taxi drivers, workers in engineering firms, fabrication, maxi drivers in Marabella, Gasparillo, Claxton Bay, San Fernando, Point Fortin, Palo Seco, Debe, Siparia, Penal etc.

    Large areas of the country are going to become an economic wasteland: mortgage foreclosures, cut back on children’s education, inability to meet loan commitments.

    The Lashley Report was published in June 2017. It said Petrotrin employs “5,322 employees (3,841 – Permanent and 1,481 – Temporary) with 1,676 (1,197 – Permanent and 479 – Temporary) in the Upstream including Trinmar (oil production), 1,835 (1,328 – Permanent and 507 – Temporary) in the Refining and Marketing and 1,463 (1,055 – Permanent and 408 – Temporary) in Corporate and Administration and the President’s Group 354 (261 – Permanent and 93 – Temporary).”

    In an advertisement published in the Sunday Express of July 29 2018 entitled The Facts, Petrotrin claimed that it had 3,437 permanent employees 1,229 non-permanent employees. This was published before the decision to close the refinery was made public. The discrepancy in the figures may be explained by workforce reduction through attrition – retirement.

    But that didn’t deter the chairman of the board from saying he did not know how many employees Petrotrin had and he wasn’t going to answer any more questions about numbers. This guy even more arrogant than GRowley! While he was bringing off on journalists Smiley Khan was giving another set of numbers in the Parliament.

    Then there is all the jhanjhat about how many contractor workers would have to go home and how many suppliers would be affected and that the government had a plan to take care of fenceline communities.

    It can never be ascertained with any precision how many non-Petrotrin workers would be affected, but some idea as to the magnitude of the job annihilation can be gleaned from figures presented to the joint select committee of March 21 2016 by then president of Petrotrin, Fitzroy Harewood. These figures are more than two years old. Harewood said: “Petrotrin has about 1,000 registered vendors, approximately that and another 2,939 vendors in terms; 1,000 registered vendors are permanent.” (Verbatim notes of the fifth meeting of the joint select committee on state enterprises, on Monday, March 21, 2016, at 9.08 a.m.)

    It is not clear whether any of the vendors mentioned above are the hundreds of contractors who are tied to Petrotrin, but former President of Petrotrin Khalid Hassanali said in 2012 there were over 700 firms registered as contractors with 75 percent of them being local. Of course over the years the figures would have changed, but it is clear that hundreds of contractors would employ thousands of workers.

    While slashing the throats of thousands of families, Rowley and Khan expressed great sadness at having to carry out this vicious deed. It’s like those parents cutting their children’s backsides and saying “this hurts me more than it hurts you!” Yeah right! Hear Smiley: “Who I am and what skills I develop I owe it to Petrotrin and it hurts my heart to see where the company has reached,” (Newsday September 7, 2018). He, then, unwittingly, places the blame for the situation where it belongs – on himself and his colleagues, by saying “the commanders of the commanding heights did not do a good job.” Oh what a tangled web…

    Taking instructions from Royal Dutch Shell chairman Charles Holliday?

    The prime minister goes to La Brea to launch a project that is being financed by a loan from China’s Exim Bank and which is going to further burden the country’s debt portfolio and says: “The government’s timing of this, of bringing it together is not accidental. We drove to this place knowing we are about to lose some jobs in Pointe a Pierre… people who will walk away with a separation cheque at Pointe a Pierre will end up in La Brea, Point Fortin, somewhere…” Whaaat! The deceit is clear when it is realised that the business contracts for the dry dock project was signed by Vasant Bharath in February 2014 and witnessed by then Prime Minister Persad-Bissessar.

    Paula Gopee-Scoon, minister of trade, claims the belt for foolishness, when she went to address the launch of the Gasparillo Chamber of Commerce and assured the business people gathered that the “soon to be restructured Petrotrin is set to re-energise South Trinidad and expand opportunities for participation by all.” (Daily Express. Monday 10 September 2018). She compounds her dotishness by adding, “The people and communities of Gasparillo and other fence-line areas will be given the opportunity to rebuild and recover and, more importantly, participate in the growth we see ahead.” Where on earth or Mars is this person living!

    Gasparillo Chamber president, Anil Ramjit, certainly didn’t put water in his mouth when he told Gopee-Sccon, “Being a fenceline community, we will suffer the most as Gasparillo and its environs are densely populated with Petrotrin employees, service companies, contractors and contracted employees… this action can and will affect immediately the cash flow within the community and therefore, the purchasing power of our residents will decline… the small and micro businesses within the community could find itself cash starved and struggling, which will eventually lead to to downsizing in a desperate attempt to stay profitable, breakeven or even survive… our very survival is in grave danger.”

    So let us not be fooled by politicians who would do anything to keep the population confused and uncertain of what to believe, while they ensure that “the local private sector obtains a larger share of the activity generated by the energy sector, especially in exploration and production, in addition to more traditional areas such as fabrication, remediation, construction, design, logistics, well services, platform operations and maintenance and support services” as stated in the PNM manifesto 2015.

    Go back and read the quotation at the top of the page. Tell me if that is not the depths of dishonesty. If GRowley considered “choices and actions in light of the impact it will have on our families, communities and the entire nation.” and he still went ahead and destroyed the lives of so many thousands then he makes Beelzebub look like a trainee imp.

    Gerry Kangalee

  • walter  On September 24, 2018 at 11:10 am

    REALLY TRINIDAD?????? As I said before who gives a rat’s ass, all I remember about Trinidad being treated like crap at the Airport. Good luck with you folks thinking that Trinidad is going to change over night.

  • Trevor  On September 26, 2018 at 10:53 am

    Guyanese get treated like dogs in Trinidad, America, Canada and England yet we are going to hand over our oil freely to Exxon and Trini petrol co.

  • walter  On September 27, 2018 at 9:56 am

    Not being spiteful, there is a hate of Guyana, that has built up over many years, not only in Trinidad but a few other West Indian islands. for so many years most prefer to buy from the U S at some ridiculous prices. if Guyana has to deal with Trinidad, because of good value, they should, as Guyanese will need time to develop their own experts and necessary equipment, but keep a close eye on them, they can be slippery. Upside, Guyana always wins in the end.

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