Kevon Felmine

Petrotrin pres­i­dent Khalid Has­sanali is fore­cast­ing a dim 2015, say­ing the state-owned oil com­pa­ny could lose 40-50 per cent in rev­enue due to the con­tin­u­ing sip in glob­al oil and gas prices.

As such, he says the com­pa­ny has read­just­ed its bud­get and will al­so have to slash drilling and de­vel­op­ment pro­grammes. The re­vised bud­get will take in­to con­sid­er­a­tion its rev­enue fore­cast over a five-year pe­ri­od, he said.

Has­sanali made the com­ment fol­low­ing the open­ing of a work­shop on in­ci­dent com­mand sys­tems at Petrotrin's staff club at Pointe-a-Pierre. He said the com­pa­ny suf­fered a loss last year and ex­pect­ed to do the same again this year.

"As you know, we are in a down cy­cle and in these down cy­cles we still have to pre­pare for when prices will 're rise.'

"We are ex­pe­ri­enc­ing about a 40 to 50 per cent loss in gross rev­enue but, like I said, we man­age our cash flows very care­ful­ly in these times," he said.

Has­sanali's state­ment comes mere days af­ter Prime Min­is­ter Kam­la Per­sad-Bisses­sar an­nounced that Gov­ern­ment would peg its na­tion­al bud­get fig­ure on US$45 a bar­rel for oil and $2.25 for gas, as well as var­i­ous cut­backs in Gov­ern­ment spend­ing, due to the falling glob­al prices.

Yes­ter­day, Has­sanali said Petrotrin would use the down cy­cle not on­ly to op­ti­mise and re­struc­ture the com­pa­ny but al­so be pre­pared for when the prices be­gan to rise.

Has­sanali said the com­pa­ny would re­duce spend­ing on its drilling and de­vel­op­men­tal pro­grammes as many of its aged as­sets need­ed to be re­placed. The fo­cus too, he said, would be on cash man­age­ment rather than ac­count­ing prof­its.

He added: "We will con­tin­ue to cut, maybe to a re­duced ex­tent, our drilling pro­grammes, our de­vel­op­men­tal pro­grammes, be­cause we have an as­set that has to be re­placed.

"We have just come out of ac­qui­si­tion of seis­mic at the ma­rine acreages in Trin­mar. We have cer­tain re­spon­si­bil­i­ties there and we al­so have al­ready start­ed de­vel­op­ment drilling in terms of our land seis­mic so there is a lot of po­ten­tial."

Al­though the oil price end­ed yes­ter­day at US$46.30 a bar­rel with gas at $2.81 per trump, Has­sanali said that would be suf­fi­cient to with­stand the cur­rent cri­sis, al­though he said that would on­ly be for a short time.

He said there were sev­er­al ini­tia­tives with the Min­istry of En­er­gy and En­er­gy Af­fairs to man­age cost care­ful­ly.

"If you think of that in terms of our lift­ing cost, in oth­er words, the mon­ey that is re­quired to take a bar­rel of oil out of the ground, we can man­age at the cur­rent pric­ing sce­nario. We can man­age on a cash ba­sis, not for­ev­er, but we can man­age for a pe­ri­od of time."

Fi­nan­cial hole

Last month, En­er­gy Min­is­ter Kevin Ram­nar­ine an­nounced in the Sen­ate that Petrotrin had suf­fered a loss of $346 mil­lion in fis­cal 2014 and had a to­tal debt of $14.38 bil­lion.

He made the com­ment as he ap­pealed to Petrotrin work­ers not to car­ry through on a pro­posed strike ac­tion over the com­pa­ny's claim that it could not in­crease salaries.

"This is not a time for ac­ri­mo­ny at Petrotrin. This is not a time to break down Petrotrin but to build up Petrotrin," he said.

Ram­nar­ine said the com­pa­ny's poor fi­nan­cial per­for­mance was part­ly due to loss­es by the re­fin­ing arm of the com­pa­ny.

The way for­ward for the com­pa­ny was to in­crease its crude oil and gas pro­duc­tion through its own ef­forts as well as from ven­tures, such as its lease op­er­a­tor­ship, far­mout, in­cre­men­tal pro­duc­tion ser­vice con­tract (IP­SC) and joint ven­ture pro­grammes.

He said im­proved pro­duc­tion was ex­pect­ed from the Trin­mar op­er­a­tions in the Ju­bilee field and the on­go­ing South West Sol­da­do project.

Con­tact­ed yes­ter­day, Petrotrin's com­mu­ni­ca­tions de­part­ment said at the end of 2013-2014 fis­cal pe­ri­od, the com­pa­ny rev­enue was TT$29.285 bil­lion and there was a loss of $347 mil­lion. The main con­trib­u­tor to the loss was a low re­fin­ery mar­gin.