Home' Trinidad and Tobago Guardian : June 29th 2017 Contents JUNE 29 • 2017 guardian.co.tt BUSINESS GUARDIAN
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Oil company at crossroads
Even as tropical storm Bret
wreaked havoc last week,
the future of a company so
inextricably linked to T&T's
history and, in effect, its fu-
ture laid in the balance.
Last Wednesday, the energy sub-com-
mittee of Parliament met to review the
findings and recommendations of the
Petrotrin Review committee which was
appointed by prime minister Keith Rowley
in March this year.
The seven-member review committee,
led by Permanent Secretary in the Minis-
try of Energy Selwyn Lashley, was tasked
with undertaking a comprehensive review
of Petrotrin's operations, and offering
solutions to determine the best path for
the beleaguered company.
According to a statement from the Office
of the Prime Minister, the recommenda-
tions emerging from the meeting will be
forwarded to Cabinet for a decision on the
way forward for the integrated oil giant.
The findings of the 43-page report, sub-
mitted June 6 to the energy sub-commit-
tee, have not been made public to date.
So far, opinions seem to be divided.
Rumours swirl that the company's man-
agement has taken issue with some of the
recommendations while Oilfield Workers
Trade Union (OWTU) leader Ancel Roget
has said publicly that "the recommenda-
tions are in line with the thinking of the
What is known for certain, is that in a
market characterised by low oil prices,
persistent over supply, and slowing de-
mand due to slower global growth, Petro-
trin is in desperate need of change.
Few companies affect the nation's psyche
In many ways, the evolution of the compa-
ny's fortune can be seen as a mirror image of
the fortunes of T&T as a whole.
What is clear, is with the country being
largely dependent on energy revenues for the
foreseeable future---and Petrotrin's significant
footprint in that area---the role of the Pointe-
a-Pierre based oil company in adding to, or
taking away from the national coffers is likely
to remain pronounced.
Since the start of 2017 the company has
dominated the headlines.
After averting the greatest strike that nev-
er happened, Prime Minister Rowley in his
January address to the nation on the state of
affairs at the company described Petrotrin as
a "ward" of the State.
In April, another oil spill at the company
put the spotlight squarely on the issue of asset
integrity at Petrotrin.
The base of tank 70 failed, releasing ap-
proximately 300 barrels of fuel oil into the
sea around the company's port facilities.
Speaking at a Mayluncheon put on by the
Energy Chamber, Petrotrin president Fitzroy
Harewood described asset integrity as the big-
gest challenge facing the company.
Harewood stated that it could cost upward
of $16 billion to address all the problems with
tanks, pipelines, berths and other assets.
Petrotrin also has significant US-dollar
denominated debt obligations.
The company has two bonds due in 2019 and
2022 for US$850 million and US$750 million
respectively. The first---and more pernicious
of the two---requires a one-time "bullet" re-
payment of the full principal in 2019.
Addressing this issue in his president's
message in the January issue of the compa-
ny's magazine Petrocom, Harewood said: "For
fiscal year 2016/2017, the company's ability
to repay its debt obligations---including the
US$850 million bond due in August 2019---
remains a huge challenge."
The second bond, raised in 2007, was to fund
the construction of a an ultra-low sulphur die-
sel (ULSD) plant.
The plant, intended to produce improved
quality diesel, and allow Petrotrin to process
a broader range of crude oil, is yet to be com-
On April 26, Moody's Investors Services
downgraded Petrotrin's debt ratings from Ba3
to B1 citing the company's "weak liquidity po-
sition and its limited ability to revert negative
operating profit due to rigid cost structure,
small operating size, and an unfavourable en-
vironment of increasing expenses."
So, where does Petrotrin go from here?
In today's Business Guardian industry ex-
perts examine the state of play at Petrotrin.
We explore the financial, environmental and
industrial relations climate at the company and
proffer solutions for taking the oil company
It is about time that you, each
and every taxpayer, each
citizen, you the shareholders
of this company, get a clear
picture of what is happening
at Petrotrin and what these
developments mean to our
already very difficult national
---Prime Minister Keith Rowley
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