San­dra Chouthi

Some of the biggest com­pa­nies in T&T's busi­ness sec­tor cap­tured head­lines in 2013.In­vestors, in­di­vid­ual and in­sti­tu­tion­al, re­ceived the news of the ini­tial pub­lic of­fer­ing (IPO) of shares in First Cit­i­zens with much ex­cite­ment. Bro­kers were hard-pressed to keep up with the in­vest­ing pub­lic's need to own a piece of T&T's in­dige­nous bank, how­ev­er small.It was huge­ly over­sub­scribed, at­tract­ing more than $3 bil­lion in of­fers while, ac­cord­ing to the prospec­tus, the net pro­ceeds were an es­ti­mat­ed $1.05 bil­lion af­ter the de­duc­tion of trans­ac­tion ex­pens­es, which were about $13.6 mil­lion, but be­fore em­ploy­ee dis­counts.First Cit­i­zens launched the largest ever IPO of shares in the his­to­ry of the T&T Stock Ex­change with a mar­ket val­ue of ap­prox­i­mate­ly $1.1 bil­lion on Ju­ly 15, 2013, at an of­fer price of $22 per share. The bank of­fered 48,495,665 shares for sale to the pub­lic, rep­re­sent­ing ap­prox­i­mate­ly 19.3 per cent of the to­tal share­hold­ing.Speak­ing be­fore the planned Sep­tem­ber 16 list­ing of First Cit­i­zens on the T&T Stock Ex­change, Wain Iton, the then TTSE gen­er­al man­ag­er and chief ex­ec­u­tive of­fi­cer, de­scribed it as "a sound in­vest­ment" and "a qual­i­ty list­ing." The First Cit­i­zens shares end­ed that first week at $34.94 per share and just be­fore Christ­mas, the share trad­ed at $40.25–an in­crease of about 83 per cent from its ini­tial of­fer price.

First Cit­i­zens share­hold­ers have all rea­son to be pleased as punch. First Cit­i­zens stat­ed in the prospec­tus it will tar­get an an­nu­al div­i­dend pay­out per­cent­age of be­tween 45 and 55 per cent of its net prof­it af­ter tax. Late in De­cem­ber, First Cit­i­zens de­clared af­ter-tax prof­its of $606.5 mil­lion for its 2013 fi­nan­cial year, which rep­re­sent­ed an in­crease of $160 mil­lion or 36 per cent com­pared with its 2012 re­sults.With earn­ings per share of $2.41, the bank's de­clared div­i­dend of $1.09 is equal to 45 per cent of its af­ter-tax prof­it–an in­di­ca­tion that the com­pa­ny has giv­en it­self the pos­si­bil­i­ty of hik­ing its div­i­dend pay­out per­cent­age in years to come.Chair­man Nyree Al­fon­so re­port­ed that for the year end­ed Sep­tem­ber 30, 2013, the bank's prof­it be­fore tax grew by 3.9 per cent to $742.2 mil­lion as com­pared to $714.2 mil­lion in the pre­vi­ous year. Prof­it af­ter tax was record­ed at $606.5 mil­lion rep­re­sent­ing an in­crease of $160.1 mil­lion or 39.9 per cent when com­pared with 2012.This is the same bank, deputy chief ex­ec­u­tive of­fi­cer Sharon Christo­pher said in the book, On Be­com­ing First, that was once dis­parag­ing­ly called scrap met­al but has since gone on to be­come the high­est rat­ed of T&T's do­mes­tic banks in the en­tire Eng­lish-speak­ing Caribbean. It had the ho­n­our of la­belling it for the third con­sec­u­tive year the on­ly bank in the Caribbean to be named amongst the safest banks in Latin Amer­i­ca and the Caribbean re­gion. Glob­al Fi­nance used a com­par­i­son of the long-term cred­it rat­ings and to­tal as­sets of the world's largest banks and rat­ings from Moody's, Fitch and Stan­dard & Poor's.The Unit Trust Cor­po­ra­tion was among sev­er­al in­sti­tu­tion­al in­vestors in the IPO, with its ex­ec­u­tive di­rec­tor Ian Chi­napoo say­ing the cor­po­ra­tion UTC ap­plied for and re­ceived 6.06 mil­lion shares, ex­act­ly half of the 25 per cent of the shares of­fered to mu­tu­al funds, and 12.5 per cent of the 48,495,665 shares on of­fer and 2.5 per cent of the bank's to­tal shares. The UTC's in­vest­ment has reaped re­wards, earn­ing it pa­per prof­its at $110 mil­lion by yearend.

NGC's in­vests big

The sec­ond largest fi­nan­cial trans­ac­tion to cap­ture the busi­ness com­mu­ni­ty's in­ter­est was the Na­tion­al Gas Com­pa­ny's (NGC) ac­qui­si­tion of the 39 per cent stake in Phoenix Park Gas Proces­sors Ltd (PPG­PL) held by Unit­ed States-based en­er­gy gi­ant Cono­coPhillips in a US$600 mil­lion deal.Speak­ing at the end of the of­fi­cial open­ing cer­e­mo­ny for the 2013 Deep­wa­ter Bid Round in Port-of-Spain in Au­gust, En­er­gy Min­is­ter Kevin Ram­nar­ine, said the deal had been signed.Ram­nar­ine said the NGC ac­qui­si­tion was the Gov­ern­ment's largest through one of its state en­ter­pris­es since 1985 when T&T ac­quired Tex­a­co Trinidad Ltd re­fin­ery, now Petrotrin.Pri­or to the deal, NGC had a 51 per cent in­ter­est in PPG­PL. The trans­ac­tion gave the state-owned nat­ur­al gas dis­trib­u­tor a 90 per cent stake. In 2001, NGC di­vest­ed 20 per cent of its shares to Na­tion­al En­ter­pris­es Ltd (NEL). The re­main­ing ten per cent is owned by Hous­ton, Texas-based Pan West En­gi­neers and Con­struc­tors Inc, a sub­sidiary of Gen­er­al Elec­tric.For the year end­ed De­cem­ber 31, 2012, NGC record­ed a $3.930 bil­lion af­ter-tax prof­it, about $670 mil­lion less than the $4.604 bil­lion prof­it it made in 2011. The com­pa­ny end­ed 2012 with $12.34 bil­lion in cash and cash equiv­a­lents.

NGC had ex­pressed an in­ter­est in ac­quir­ing Cono­coPhillips's 39 per cent share since 2003. Cono­coPhillips changed its mind in 2004, but re­versed that de­ci­sion in 2013. Be­fore pro­ceed­ing with the deal, NGC sought the opin­ions of First Cit­i­zens and Cred­it Su­isse, with the two en­dors­ing the buy.Speak­ing on the com­po­si­tion of the PPG­PL board, Ram­nar­ine said there were sev­en di­rec­tors: four from NGC, two from Cono­coPhillips and one from GE. Now NGC will have six out of the sev­en."This gives us con­trol of an as­set re­spon­si­ble for mar­ket­ing liq­ue­fied pe­tro­le­um gas (cook­ing gas) and nat­ur­al gaso­line," Ram­nar­ine said.Fol­low­ing the trans­ac­tion, NGC chair­man In­dar Ma­haraj de­scribed NGC's ac­qui­si­tion of an ad­di­tion­al 39 per cent stake in PPG­PL as an "ex­cel­lent" deal for the com­pa­ny and T&T.The trans­ac­tion was fi­nanced from NGC's in­ter­nal­ly-gen­er­at­ed re­sources, said Ma­haraj in a Busi­ness Guardian in­ter­view, at which he was ac­com­pa­nied by NGC's vice pres­i­dent, com­mer­cial, Anand Rag­bir."When we look at the price we paid for it and the strate­gic and fi­nan­cial re­turns from it, we know that we got a very good ac­qui­si­tion," Ma­haraj said.

He said PPG­PL has been a very prof­itable op­er­a­tion over the years be­cause it gets its raw ma­te­r­i­al, nat­ur­al gas, from the NGC "at what we con­sid­er to be a low price.""What it meant, there­fore, is that PPG­PL has a low-cost in­put that gen­er­ates a high-val­ue end prod­uct, which would have re­sult­ed in the com­pa­ny gen­er­at­ing a great deal of cash, mak­ing it a very prof­itable op­er­a­tion," Ma­haraj said.Speak­ing at NGC's Christ­mas func­tion at the Hy­att Re­gency Trinidad ho­tel, Ram­nar­ine said 2013 would go down as the year the NGC was trans­formed from a com­pa­ny that had a nar­row re­mit to trans­port, ag­gre­gate and mar­ket nat­ur­al gas to a ful­ly in­te­grat­ed gas com­pa­ny.He said three ma­jor feats were achieved in 2013 at NGC: a move by NGC to self-mar­ket its LNG car­goes; the ac­qui­si­tion of 39 per cent of PPG­PL and the ac­qui­si­tion of Blocks 2c and 3a, which "gives us a larg­er pres­ence in the up­stream."Ram­nar­ine said one ma­jor ini­tia­tive to ex­pect from NGC in 2014 is the list­ing of a por­tion of PPG­PL on the T&T Stock Ex­change."This may eclipse the FCB IPO of 2013," he said.

Gas short­age is­sues

The planned turn­around of bpTT's Cas­sia B off­shore gas fa­cil­i­ty, one of the en­er­gy com­pa­ny's 13 off­shore plat­forms, in Sep­tem­ber, was a sig­nif­i­cant de­vel­op­ment in the en­er­gy sec­tor for 2013. The main­te­nance in­ter­ven­tion cost $50 mil­lion.Two-thirds of bpTT's dai­ly gas pro­duc­tion is de­liv­ered through the Cas­sia fa­cil­i­ty, which has op­er­at­ed 34.5 miles off the south­east cost of Trinidad for the past ten years. The manned fa­cil­i­ty is de­signed to han­dle up to two bil­lion stan­dard cu­bic feet of gas per day.In a state­ment, bpTT said the project in­clud­ed on­ly ten days of ma­te­r­i­al im­pact on bpTT's gas sup­ply. Dur­ing that pe­ri­od bpTT con­duct­ed mod­i­fi­ca­tions to the fa­cil­i­ty to al­low gas from its oth­er off­shore in­stal­la­tions to by­pass the Cas­sia hub."Ear­ly com­ple­tion of the turn­around was due to many fac­tors, in­clud­ing si­mul­ta­ne­ous ac­tiv­i­ty on the turn­around scope made pos­si­ble by the ear­ly com­ple­tion of the by­pass work in the first ten days of the project, no coat­ing re­pairs be­ing re­quired for the ves­sels fol­low­ing in­spec­tions and good weath­er dur­ing the pe­ri­od," read the state­ment.

Dur­ing that pe­ri­od bpTT con­duct­ed mod­i­fi­ca­tions to the fa­cil­i­ty to al­low gas from its oth­er off­shore in­stal­la­tions to by-pass the Cas­sia hub. These mod­i­fi­ca­tions sig­nif­i­cant­ly re­duced the pro­duc­tion im­pact for the re­main­der of the planned main­te­nance ac­tiv­i­ty, it said."Over 30,000 man­hours were spent plan­ning the $50 mil­lion ac­tiv­i­ty, which in­clud­ed a turn­around and em­ployed over 120 na­tion­als," bpTT said.Giv­en the con­cern over mar­ket im­pact, bpTT said it worked with the Gov­ern­ment and key stake­hold­ers to align the Cas­sia pro­gramme with At­lantic's turn­around on Train 3 and the planned main­te­nance work of the down­stream op­er­a­tors."This align­ment of up­stream, mid­stream and down­stream ac­tiv­i­ty re­sult­ed in min­i­mal im­pact to the mar­ket due to the re­duced gas de­mand over the pe­ri­od.""The Cas­sia turn­around and work pro­gramme were of crit­i­cal im­por­tance to our coun­try and com­pa­ny," said bpTT pres­i­dent Nor­man Christie. "We are proud that our team was able to safe­ly com­plete the work ahead of sched­ule with min­i­mal dis­rup­tion to gas sup­ply," the state­ment added.

Plans to mit­i­gate the ef­fects of the turn­arounds on the mar­ket took place over eight months. The Min­istry of En­er­gy and En­er­gy Af­fairs worked with NGC and the Point Lisas En­er­gyAs­so­ci­a­tion (PLEA), a group of 21 ma­jor com­pa­nies op­er­at­ing in the down­stream en­er­gy sec­tor, At­lantic, bpTT and BG T&T, to co-or­di­nate and re­duce the im­pact of the sched­uled main­te­nance work on Cas­sia B and BG T&T's Dol­phin plat­forms be­tween Sep­tem­ber and Oc­to­ber.The fa­cil­i­ty is ex­pect­ed to be of­fline for ap­prox­i­mate­ly 35 days to con­duct ves­sel in­spec­tions and up­grades.The ini­tial turn­around for BG T&T's Dol­phin plat­form, in op­er­a­tion for 17 years, was planned for 26 days, but BG T&T re­duced this time while main­tain­ing the orig­i­nal scope of works.And, At­lantic's Train 3 Train 3 was al­so tak­en of­fline for 28 days of planned main­te­nance.

Trin­i­ty strikes gold

In­de­pen­dent Trinidad com­pa­ny Trin­i­ty Ex­plo­ration and Pro­duc­tion end­ed 2013 on a hap­py note.In ear­ly De­cem­ber, Trin­i­ty re­port­ed an oil find of an es­ti­mat­ed 115 mil­lion bar­rels in east Trinidad.En­er­gy Min­is­ter Kevin Ram­nar­ine de­scribed the on­ly ma­jor oil find an­nounced for 2013 as "good news for T&T" for the Christ­mas sea­son."We have some pos­i­tive news for the econ­o­my and the coun­try," he said.In a state­ment, Trin­i­ty's largest in­de­pen­dent ex­plo­ration and pro­duc­tion com­pa­ny an­nounced its third ex­plorato­ry drill had hit black gold in the TGAL-1 well, off Ga­le­o­ta on Trinidad's south­east coast.Ini­tial es­ti­mates show the reser­voir con­tains a pro­duc­tion range of 50 mil­lion to 115 mil­lion bar­rels of oil. TGAL-1 was spud­ded on Oc­to­ber 31 to tar­get an up­dip ex­ten­sion of the pro­duc­ing Trintes Field, us­ing the Rowan Go­ril­la III jack-up rig.The well was drilled to a to­tal depth of 5,694 feet, in­ter­sect­ing five tar­gets all con­tain­ing good qual­i­ty oil bear­ing reser­voir sands. The TGAL-1 well en­coun­tered a to­tal of 547 feet net oil sands con­tain­ing high qual­i­ty 28-30 de­gree API oil.

The API, or Amer­i­can Pe­tro­le­um In­sti­tute, grav­i­ty is a stan­dard mea­sure of den­si­ty to de­ter­mine how heavy or light the pe­tro­le­um de­posits are. The high­er the den­si­ty (that is, the lighter the oil) the more valu­able it is. This find may be clas­si­fied as medi­um to light crude oil. Gen­er­al­ly speak­ing, crude oil with den­si­ty range of 40 to 45 com­mands the high­est prices. T&T's east coast wells gen­er­al­ly pro­duce a "light sweet crude" (low sul­phur con­tent) with an av­er­age API rat­ing of 38 de­grees.Trin­i­ty ac­quired the Ga­le­o­ta li­cence af­ter its merg­er with Bay­field En­er­gy Hold­ings in ear­ly 2013. Last year March, Bay­field struck oil with its first ex­plorato­ry well, EG8, in the same block. The pro­duc­tion es­ti­mates for that find were 32 mil­lion.Ga­le­o­ta Li­cence pro­vid­ed for sev­en ex­plorato­ry wells. TGAL-1 was the third ven­ture. The com­pa­ny's sec­ond ex­plo­ration ven­ture was un­suc­cess­ful.Trin­i­ty's two out of three suc­cess al­ready sur­pass­es the usu­al odds of one well in sev­en strik­ing oil.The Trin­i­ty Group has a 65 per cent in­ter­est in the Ga­le­o­ta Li­cence, with Petrotrin hold­ing the re­main­ing 35 per cent.With this dis­cov­ery, Trin­i­ty said it will now be as­sess­ing ap­praisal and de­vel­op­ment op­tions. Pro­duc­tion on the well is ex­pect­ed to be­gin by 2015.

Non-en­er­gy sec­tor

The non-en­er­gy sec­tor con­tin­ued to ex­pand in the third quar­ter of 2013, but at a slow­er pace than the pre­vi­ous two quar­ters.Ac­cord­ing to the No­vem­ber 2013 Mon­e­tary Pol­i­cy Re­port, ini­tial da­ta in­di­cate that the non-en­er­gy sec­tor rose by 1.9 per cent (year-on-year) in the third quar­ter com­pared with 2.6 per cent in the sec­ond quar­ter and 3.6 per cent in the first quar­ter.Growth in the third quar­ter was large­ly as­so­ci­at­ed with fi­nance (4.4 per cent), con­struc­tion (3.0 per cent) and dis­tri­b­u­tion (1.1 per cent) sec­tors.Height­ened ac­tiv­i­ty with­in fi­nance was part­ly at­trib­ut­able to strong per­for­mance with­in the com­mer­cial bank sub-in­dus­try, as banks record­ed growth in loans and de­posits in the sec­ond quar­ter.The re­port said the in­crease in con­struc­tion ac­tiv­i­ty was like­ly re­lat­ed to sev­er­al pub­lic sec­tor projects, in­clud­ing high­way con­struc­tion and hous­ing, and per­haps to a less­er ex­tent, some pri­vate sec­tor de­vel­op­ments. Lo­cal sales of ce­ment � a key in­di­ca­tor of con­struc­tion sec­tor ac­tiv­i­ty � was up on a year-on-year ba­sis by 12.5 per cent in the third quar­ter.

There were al­so pos­i­tive in­di­ca­tions of growth in the dis­tri­b­u­tion sec­tor. For ex­am­ple, sales of new mo­tor ve­hi­cles in­creased by 13.1 per cent (year-on-year) in the third quar­ter of 2013.

The agri­cul­tur­al sec­tor al­so record­ed some growth.The Cen­tral Bank said es­ti­mates from da­ta sup­plied by the Na­tion­al Agri­cul­ture and De­vel­op­ment Cor­po­ra­tion in­di­cate the agri­cul­ture sec­tor grew by 1.9 per cent in the third quar­ter of 2013.Sup­ple­men­tary in­for­ma­tion for the third quar­ter of 2013, sourced from the Nor­ris De­onar­ine North­ern Whole­sale Mar­ket, showed in­creased lo­cal vol­umes of se­lect­ed com­modi­ties at the mar­ket. Com­par­a­tive­ly bet­ter weath­er con­di­tions through­out the ma­jor­i­ty of 2013 and the con­tin­u­a­tion of tar­get­ed poli­cies aid­ed strong growth for the pe­ri­od.The Cen­tral Bank said af­ter post­ing strong growth of 4.6 per cent in the sec­ond quar­ter, ac­tiv­i­ty in the man­u­fac­tur­ing sec­tor was flat in the third quar­ter of 2013.