The Trinidad and Tobago government said it will divest part of state-owned Petrotrin as it tries to increase crude production, increase efficiency, and return the company to profitability.
In an address to the nation, the Caribbean twin-island nation’s Prime Minister Keith Rowley said it could not be “business as usual” and that the company desperately needed investment in technology and an injection of capital.
“Because of financial constraints at both the level of the state and the company, rectifying this imbalance now can only be effected by imports of external and domestic capital as well as new technology into oil and gas production at Petrotrin,” Rowley said.
“Survival depends on such a successful import demanding the cooperation of all the company’s stakeholders. In this approach there will be opportunities for local equity investment and employee stock ownership in a future profitably restructured company,” he said.
Petrotrin operates a 165,000-b/d refinery and is the largest supplier of refined products to the Caribbean. It also exports gasoline to the US East Coast and to parts of Latin America. It also produces 45,000 b/d of crude oil from its onshore and offshore fields.
Rowley’s announcement came a short time after a strike by the company’s 5,000 workers was called off after they accepted an interim settlement of 5% in wage increases for a 2-year period (OGJ Online, Jan. 5, 2017). After the workers had gone on strike, the government ordered Petrotrin to agree to the pay increase.
Late in 2016 the country’s former energy minister had hinted that the sale of Petrotrin’s Trinmar asset was inevitable. Nicole Oliverre told the Parliament that Petrotrin would be seeking new commercial partnerships under its third-party arrangements to aggressively develop Trinmar’s assets. “The company intends to engage an international consultant to advise on an optimal monetization strategy based on the board’s decision to engage one [joint venture] partner for the entire Trinmar acreage,” Oliverre said.
In a recent memo to workers, Petrotrin Pres. Fitzroy Harewood noted that the company’s revenues had declined by more than 50% from 2012-16. This, coupled with the ongoing decline in refinery margins and lower oil production, resulted in the company realizing 2 years of net aftertax losses.