PORT OF SPAIN, Trinidad – Prime Minister Dr. Keith Rowley Monday said that the government is expected to announce soon the preferred bidder for the refinery at Point a Pierre, south of here, which had been shut down due to the million of dollars in losses.
Oil refinery in Trinidad (File Photo)Addressing the three-day Trinidad and Tobago Energy Conference organised by the Energy Chamber of Trinidad and Tobago, Rowley said that with regard to the refinery bids, the first offers were found to be less than satisfactory and were aborted.
“Following a review of the criteria, expressions of interest were re-invited for the sale or lease of the Guaracara refinery and its ancillary assets. 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 selection of the most suitable company. It is anticipated that the negotiations will be completed before the end of February 2025, hopefully with an announcement of the selected company, shortly thereafter,” Rowley told the conference being held under the theme “Investing in the Future”.
Among the companies that had offered a bid for the refinery was the Patriotic Services Co Ltd, which is headed by the Oilfield Workers’ Trade Union (OWTU).
The main opposition United National Congress (UNC) had last year expressed serious concerns regarding the bidding process, demanding that the procedure be scrapped entirely and that a criminal forensic investigation be initiated.
The UNC made the call after accusing the government of attempting to manipulate the process to favour Indian businessman Naveen Jindal, who later withdrew his bid citing “character assassination” from the Opposition following his visit to Trinidad on June 17 last year.
In his budget presentation last October, Finance Minister Colm Imbert announced that Cabinet had shortlisted three companies from a total of 10 interested parties. The shortlisted bidders consist of CRO Consortium, a Trinidad-based entity comprising DR Commodities Ltd, Chemie-Tech, and Ocala; iNca Energy LLC from the United States and Dando PLC from Nigeria. The selection process was conducted by Scotia Capital (USA) in partnership with an evaluation committee.
Rowley told the conference that all had not been well the state-owned energy company, PETROTRIN, with its production levels in its mature fields plummeting and 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”.
He said 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 US450 million of PETROTRIN’s debt.
Rowley said government’s decision to restructure the oil company has been vindicated by the performance of the operating companies, Heritage Petroleum Company Limited and Paria Fuel Trading Company.
“From its inception Heritage has been profitable with annual net profits in excess of one billion dollars (One TT dollar=US$0.16 cents) for most of its short history. Its success has enabled the company to contribute TT$7.75 billion towards debt service of the TPHL Group over the period commencing 2019 to 30 June 2024.
“Additionally, from inception to date, Heritage has paid TT$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. “
He said Paria likewise has returned a profit each year since its inception and that effective cost management measures, operational efficiencies, favorable market prices and expansion of the bunkering business have been responsible for the company’s financial success.
“The government has been the recipient of corporation tax and green fund levy of TT$1.2 billion, from Paria, since the startup of operations on December 1st, 2018, up to September 30th, 2024.”
Rowley said that having firmly and carefully addressed the issue with PETROTRIN, its operations and its financial sustainability, the government focused on revitalizing the other elements of the domestic energy sector, with particular emphasis on the upstream sector.
He said although confidence had been restored in the industry, inertia still existed.
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 engagement of major energy stakeholders.
“Through such engagement there has been a renewed commitment by companies to deepen their investment in the domestic energy sector. 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 six billion US dollars for the preceding four years,” Rowley said.
