Home' Trinidad and Tobago Guardian : August 10th 2014 Contents The Petrotrin refinery at Pointe-
a-Pierre---already under local
scrutiny because of the oil spill
at the end of July---could find
itself in the international spot-
light if there is an escalation
in US sanctions on Russia,
following revelations that the facility is a sig-
nificant importer of Russian crude oil.
The Eurasian country banned a wide array of
food imports from Western countries on Thurs-
day in a spiraling sanction war amid the worst
ties between Russia and the West since the Cold
In retaliation against Western sanctions, Russ-
ian President Vladimir Putin on Wednesday
signed a decree imposing a one-year ban on the
importation of all agricultural, raw and food
The ban by Russia prevents the country from
importing beef, pork, poultry, fish, cheeses, fruit,
vegetables and dairy products from Australia,
Canada, the European Union, the United States
Since March this year, the United States, the
European Union, Japan and Australia have intro-
duced a range of sanctions against Russian entities
and individuals after Moscow s annexation of
Crimea, which was formerly part of Ukraine,
and its involvement in armed standoff in Ukraine s
Information on the Ministry of Energy s Web
site (consolidated monthly bulletins of June 2014)
indicates that Russia supplied Petrotrin with
1,440,812 barrels of crude oil between January
and June, 2014, representing about 15.1 per cent
of total imports for the six-month period, which
amounted to 9,485,466 barrels.
The data also reveal that Russia is the third
largest supplier of crude to T&T in 2014 following
Gabon (with 59.8 per cent or 5,671,826 barrels)
and Colombia (with 15.6 per cent or 1,482,831
In January, the Breaking News Web site report-
ed that for the period January to November 2013,
T&T imported 2,550,002 barrels (bbls) of crude
oil, of which 28 per cent came from Russia (some
723,476 barrels) while 40 per cent from Colombia
In April and June, Petrotrin accepted two
720,000-barrel cargoes of Russian Ural-blend
oil---which meets the product specifications of
the Petrotrin refinery.
Petrotrin has been importing Ural-blend crude
from Russia since April 2008.
In an interview with the Sunday BG on August
2, Petrotrin president Khalid Hassanali, said the
company had taken a decision to stop production
at the cat cracker unit of the refinery in February
for economic reasons.
Without the production from the cat cracker,
the Petrotrin refinery currently processes about
120,000 barrels of heavy crude oil, producing
a variety of products including diesel, gasoline,
cooking gas and jet fuel.
The T&T market for fuel accounts for between
15,000 and 20,000 of Petrotrin s throughput,
Hassanali said although the refinery, as cur-
rently configured, has a capacity to refine between
160,000 and 168,000 barrels per day, if Petrotrin
produced at the maximum capacity its losses
The cat cracker is the unit at the refinery at
Pointe-a-Pierre that Petrotrin upgraded at huge
expense, starting in 2006, to increase its capacity
from 26,000 to 35,000 barrels per stream a day
of gasoline with higher octane ratings and lower
production costs of heavier crude.
"We are trying to optimise, not maximise,
the throughput at the refinery," said Hassanali.
The oil executive said, "if refinery margins con-
tinue to be compressed, the company as a whole
expects to lose money in 2014, despite the advan-
tage that it has of being able to produce equity
Several oil refineries in the Caribbean have
been forced to close in recent years because of
margin compression, Hassanali noted.
Without the cat cracker, Petrotrin is producing
120,000 barrels, with roughly 50,000 boppd of
which is coming from local crude.
This means that Petrotrin is required to import
about 70,000 barrels of oil per day.
Responding to questions on Wednesday, Has-
sanali said that Petrotrin had spent US$1.3 billion
importing crude oil between January and July.
In brief responses by e-mail to questions sent
to him on the issue of the potential impact of
the company s imports of Russian crude:
Q: Is all of the crude (some 70,000 barrels
a day by your estimate) currently coming
A: Crude is purchased from diverse sources
and geographic locations.
Q: Do you think the US pressure on the
international community to sanction Russia
will have an impact on Petrotrin s imports
on Russian oil?
A: At this time the suppliers with whom we
trade are not impacted by sanctions and hence
we are not affected.
Q: Has Petrotrin explored the possibility
of getting similar quality crude from other
A: Petrotrin currently purchases crude oil with
similar quality from other regions.
Q: Have the existing sanctions impacted
on Petrotrin s ability to pay for the Russian
A: Our ability to pay for Russian crude oil has
not been affected.
Q: Can you confirm that, year-to-date,
Petrotrin has spent about US$7 million a
day importing crude (which would mean
217 days X 7 million = $1.5 billion).
A: Over the last seven months, Petrotrin has
spent approximately US$1.3 billion on a variety
of imported crude oil from different parts of the
The US State Department, responding to
questions from the Sunday BG on Thursday,
advised companies and countries to be vigilant
when dealing with counterparts in Russia.
The Sunday BG had enquired whether T&T
risked running afoul of US foreign policy if
"The United States has imposed financial pro-
hibitions on a number of Russian financial insti-
tutions and energy companies and has also sanc-
tioned numerous Russian defense firms, senior
Russian government officials, members of Pres-
ident Putin s inner circle, and Ukrainian separatist
leaders involved in undermining Ukraine s sov-
"We urge all businesses to exercise vigilance
to ensure that they are not dealing with a sanc-
tioned individual or entity. A list of sanctioned
individuals and entities is available on the US
Treasury Department s Web site and the private
sector is encouraged to reach out to Treasury s
Office of Foreign Assets Control (OFAC) for guid-
ance on a case-by-case basis.
"We also encourage all companies to monitor
developments in Russia carefully as they make
decisions about doing business there."
Asked whether it would stop purchasing Russ-
ian crude, the state-owned energy company
said that, at this point, its suppliers are not under
any sanctions and that payments for its Russian
cargoes are made through US banks that, to
date, have raised no objections to processing
However, following the shooting down of the
Malaysian Airlines aircraft over Ukraine on July
17, Petrotrin took the precaution of investigating
the possibility of securing an alternate source of
supply of crudes with similar chemical properties
to Russian crude.
The company also disclosed that it had placed
an order for a shipment of Russian crude before
the Malaysian Airline incident and that the cargo
will be accepted.
The US imposed sanctions on Russian indi-
viduals and entities on March 16, April 28 and
July 16 and July 29.
In the July 16 announcement, the Department
of Treasury announced that it was imposing
sanctions that prohibit US persons from providing
new financing to two major Russian financial
institutions (Gazprombank OAO and VEB) and
two Russian energy firms (OAO Novatek and
Rosneft), limiting their access to US capital
The Treasury announcement makes it clear
that trade in goods between the US and Russia
was not being sanctioned, stating: "We have not
blocked the property or interests in property of
these banks/companies, nor have we prohibited
transactions with them beyond these specific
The announcement also made clear that the
prohibition on providing new financing to the
named Russian companies was limited to US
Later Friday, T&T s Ministry of Foreign Affairs
said in a statement that it was "monitoring the
AUGUST 10 • 2014 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
COVER STORY | SBG3
No bar to Petrotrin
purchasing Russian oil
Customers look at shelves with imported fruit and vegetables at a supermarket in Novosibirsk,
about 2,800 kilometers (1,750 miles) east of Moscow, Russia, on Thursday. Russia banned most
food imports from the West in retaliation for sanctions over Ukraine, an unexpectedly sweeping
move that will cost farmers in North America, Europe and Australia billions of dollars but will
also likely lead to empty shelves in Russian cities. (AP)
We are trying to optimise,
not maximise, the
throughput at the
margins continue to be
compressed, the company
as a whole expects to lose
money in 2014, despite the
advantage that it has of
being able to produce
equity crude. Khalid Hassanali
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