Last update: 12-Dec-2013 4:50 am
Thursday, December 12, 2013
Trinidad & Tobago Guardian Online
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Lower profits this year says Petrotrin boss
Petrotrin president Khalid Hassanali said the company’s profits could be significantly lower this year as a result of industrial unrest in March, the nationwide blackout on Good Friday and overdue refinery maintenance works. Last year, the company’s recorded a profit of $1.009 billion.
Hassanali told the T&T Guardian industrial action taken against the company by the Oilfield Workers Trade Union (OWTU) earlier this year cost more than the $700 million—$100 million for each of the seven days of the strike. He said returning the refinery to optimum levels of productivity took an additional 14 days, adding to the losses.
“What we did say at that time was that our gross earning at the refinery was about $100 million per day. The refinery is a large complex organisation. It doesn’t have an on-off switch, so when its goes down it takes about two weeks to restart. So you can imagine the impact. “It must impact us and it has impacted us for last year. What has compounded it—you will recall we had a Good Friday shutdown of the country because of a power failure—that also took some time to restart,” Hassanali said.
“And, then last year was a year in which we did quite a bit of turn around, a lot of maintenance at the refinery some which was overdue, because some of those plants need to be shut down every three to five years, taken out of service and completely overhauled, to be safe and to be efficient in its running.
“Some of these plants have not been shut down for about eight years, so we are catching up and we are hopeful by early 2014 we should have caught up more or less in terms of our maintenance schedule. So, last fiscal year was also a year of maintenance and we were also down quite a bit for that purpose.”
Hassanali said while there had been problems the refinery and marketing (R&M) side of the business over the last few months, the exploration and production (E&P) arm has been reasonably profitable due to higher world prices for crude oil.
“But because prices have risen and the product prices remain the same, we have a squeezed margin and that margin is such that the economics of refining these days is unfavourable. This changes all of the time. It does not mean that we are in a bad state. It just means that right now, E&P is profitable. R&M is not profitable.
“That’s the beauty of having an integrated company. Sometimes one carries the other, sometimes both do very well, but because of the situation in the Middle East this is how the economics is running. So to answer your question, Yes! The losses last year were significant and they were compounded by these other issues.”
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