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The Caribbean Community’s most important oil refinery will remain close for a while yet after authorities in Trinidad again rejected a takeover bid by its labor union, citing the group’s inability to raise enough financing to be handed the facility.
The administration of Prime Minister, Keith Rowley had allowed itself to be persuaded to negotiate with an Oilfield Workers Trade Union (OTWU)-led group to take over the shuttered Petrotrin refinery in South Trinidad, retrofit it, rehire hundreds of workers and restart operations but officials said this week that it was clear that Patriotic Energies and Technologies Limited was struggling to meet a sale price of more than $700 million.
This is the second time in three months that the cabinet has turned away the union-led bid but union President, Ancel Roget said authorities did not help the group enough by removing mortgage on assets so they take over could have been easier.
The more than 100-year old refinery had been a reliable supplier of oil and products to several CARICOM countries including Guyana, Barbados, St. Vincent and others. When the cabinet ordered it closed in late 2018, it sent governments in the region scrambling for new oil suppliers as they waited a while to see if new buyers would take over. Nothing has happened since, meaning that countries are being forced to source supplies from outside the 15-nation single trading bloc.
“We were derailed by the government’s offer. The minister of finance on Sept. 25, 2019 would have derailed Patriotic because Patriotic came to the table with an upfront US$700 million to purchase these assets. “The government said no we have a better offer — 10 years to pay and three years to start paying and some 10 things to work out. We did all of that, but when the rubber hits the road, when we were supposed to get this thing operational, the bond holders who were perhaps not a part of government’s offer, said no that cannot happen,” a clearly frustrated union leader told reporters.
PM Rowley had said the refinery had been a financial burden on the treasury, carrying debts of more than $1 billion and needing then about $4 billion to remain open. “There is no way that the company can find this money. No financier will lend it because the company simply will not be able to repay such an additional loan,” Rowley told reporters. Minister of Energy, Franklin Khan said, “the government will immediately return to the open market to explore all other options.” Patriotic is not barred from bidding again.
The refinery’s closure had placed nearly 3,000 workers on the breadline and had almost decimated economic life and small businesses, including food vending. It was the linchpin of Trinidad’s now declining oil sector with daily production declining to less than 100,000 barrels day, less than neighboring Guyana, which only began producing and exporting in late 2019.
As the fallout from the latest rejection of Patriotic’s bid becomes clear, Opposition Leader and former prime minister, Kamla Persad-Bissessar demanded the resignation of her successor, contending that it becomes mopre expensive to repair and restart with each passing day that the plant remains idle.
“Given that the Petrotrin Refinery has been shut for almost three years now and with every increasing costs to restart it, who will now want to purchase this asset”? she asked. “We must also ask the question of whether or not the government will allow the Maduro regime the opportunity to purchase the refinery.”
Roget says he wants to sit down with officials and defend the union’s bid because justice was not done.
“We today reaffirm our commitment to the restart of the refinery. We reaffirm our request to meet with the minister and his team to interrogate Credit Suisse’s commitment to stand with us. Our business partners are still with us at the table. The suppliers of crude to make sure we have a feedstock for the refinery, are still at the table. The markets for the products are still with us.”
The Caribbean Community’s most important oil refinery will remained close for a while yet after authorities in Trinidad again rejected a takeover bid by its labor union, citing the group’s inability to raise enough financing to be handed the facility.
The administration of Prime Minister Keith Rowley had allowed itself to be persuaded to negotiate with an Oilfield Workers Trade Union (OTWU)-led group to take over the shuttered Petrotrin refinery in South Trinidad, retrofit it, rehire hundreds of workers and restart operations but officials said this week that it was clear that Patriotic Energies and Technologies Limited was struggling to meet a sale price of more than $700 million.
This is the second time in three months that the cabinet has turned away the union-led bid but union President Ancel Roget said authorities did not help the group enough by removing mortgage on assets so they take over could have been easier.
The more than 100 year old refinery had been a reliable supplier of oil and products to several Caricom countries including Guyana, Barbados, St. Vincent and others. When the cabinet ordered it closed in late 2018, it sent governments in the region scrambling for new oil suppliers as they waited a while to see if new buyers would take over. Nothing has happened since, meaning that countries are being forced to source supplies from outside the 15-nation single trading bloc.
“We were derailed by the government’s offer. The minister of finance on September 25, 2019 would have derailed Patriotic because Patriotic came to the table with an upfront US$700 million to purchase these assets. “The government said no we have a better offer – ten years to pay and three years to start paying and some ten things to work out. We did all of that, but when the rubber hit the road, when we were supposed to get this thing operational, the bond holders who were perhaps not a part of government’s offer, said no that cannot happen,” a clearly frustrated union leader told reporters.
PM Rowley had said the refinery had been a financial burden on the treasury, carrying debts of more than $1 billion and needing then about $4 billion to remain open. “There is no way that the company can find this money. No financier will lend it because the company simply will not be able to repay such an additional loan,” Rowley told reporters. Energy Minister Franklin Khan said “the government will immediately return to the open market to explore all other options.” Patriotic is not barred from bidding again.
The refinery’s closure had placed nearly 3,000 workers on the breadline and had almost decimated economic life and small businesses, including food vending. It was the linchpin of Trinidad’s now declining oil sector with daily production declining to less than 100,000 barrels day, less than neighboring Guyana which only began producing and exporting in late 2019.
As the fallout from the latest rejection of Patriotic’s bid becomes clear, Opposition Leader and former prime minister Kamla Persad-Bissessar demanded the resignation of her successor, contending that it becomes mopre expensive to repair and restart with each passing day that the plant remains idle.
“Given that the Petrotrin Refinery has been shut for almost three years now and with every increasing costs to restart it, who will now want to purchase this asset”? she asked. “We must also ask the question of whether or not the government will allow the Maduro regime the opportunity to purchase the refinery.”
Roget says he wants to sit down with officials and defend the union’s bid because justice was not done.
“We today reaffirm our commitment to the restart of the refinery. We reaffirm our request to meet with the minister and his team to interrogate Credit Suisse’s commitment to stand with us. Our business partners are still with us at the table. The suppliers of crude to make sure we have a feedstock for the refinery, are still at the table. The markets for the products are still with us.”
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