Trinidad and Tobago’s state-owned Petroleum Co. of Trinidad & Tobago Ltd. (Petrotrin) plans to end the company’s refining operations at its 165,000-b/d Pointe-a-Pierre refinery.
The company’s management made the announcement in an Aug. 28 meeting of the company’s board and its employee representative unions, Petrotrin said in a release.
With the cessation of refining operations, Petrotrin plans to entirely redesign its exploration and production business, with the restructuring exercise geared to curtail the company’s losses and usher it on a path to sustainable profitability, the operator said.
About 2,600 permanent jobs will be affected by the restructuring, including elimination of 1,700 jobs in the refining business.
The company, however, will keep about 800 workers in the redesigned E&P business.
The announcement follows months of careful review and analysis by the Petrotrin’s board, which was tasked last September to identify internal problems and take whatever steps necessary to make the company self-sustainable and profitable.
During the last 5 years, Petrotrin said it has lost a total of about $8 billion (TTD), is $12 billion (TTD) in debt, and owes the government of Trinidad and Tobago more than $3 billion (TTD) in taxes and royalties.
To refresh its infrastructure and repay its debt, the company said it requires a cash injection of $25 billion (TTD) to stay alive.
Even with that cash infusion, however, Petrotrin said it is projected to continue losing about $2 billion/year should it attempt to maintain its current integrated business of refining alongside E&P.
“With the termination of the refining operations and the redesign of [E&P], Petrotrin will now be able to independently finance all of its debt and become a sustainable business,” said Petrotrin Chairman Wilfred Espinet.
Closure of the refinery comes amid a lack of domestically produced crude oil to serve as feedstock for the manufacturing site.
“Petrotrin is no longer producing enough oil to operate the Pointe-a-Pierre refinery efficiently[; w]e are producing [about] 40,000 b/d and the refinery operates at a capacity of 140,000 b/d, so we have to go to the market to buy about 100,000 b/d to make up the shortfall[, which] results in a net loss in foreign exchange,” Espinet said.
The period of transition, including the phasing out of oil refining operations at Pointe-a-Pierre, will begin on Oct. 1.
Moving forward, the company will import refined product requirements for the country—about 25,000 boe/d—and begin exporting all its oil production.
“Our goal is for Petrotrin be an internationally competitive and sustainably profitable leader in the local energy sector; and an employer of choice, that is a source of national pride,” Espinet said.
The company said it will be meeting with all its stakeholders during the coming weeks to discuss how the proposed changes may affect them.
Petrotrin took ownership of the Point a Pierre refinery from Texaco Inc. at a time when the refinery was the fifth-largest in the world processing 375,000 b/d. The refinery played a crucial role in providing fuel for the allies in World War II.
Contact Robert Brelsford at [email protected].
