A three-month strike at Petrotrin would have resulted in a loss of close to $500 million for the debt-ridden energy company but would have inflicted far more damage on the T&T economy, Prime Minister Dr Keith Rowley said last night.
In an address to the nation, in which he focused on the dire financial situation at the state-owned energy company and detailed how Government had intervened to avert the strike, Dr Rowley announced that steps will be taken to turn around Petrotrin's fortunes.
He also assured that his administration "will do all that has to be done to keep our country out of the grip of the lender of last resort, the IMF."
"Because of financial constraints at both the level of the state and the company, rectifying this imbalance now can only be effected by imports of external and domestic capital as well as new technology into oil and gas production at Petrotrin," he said.
"Survival depends on such a successful import demanding the co-operation of all the company's stakeholders. In this approach there will be opportunities for local equity investment and employee stock ownership in a future profitably restructured company."
Dr Rowley said Wendell Mottley, a former finance minister, is among the experts advising Cabinet on the matter, along with members of the sub-Committee in Energy. In addition, prior to the labour dispute, the Oilfields Workers Trade Union (OWTU) had been asked to share their ideas for improving the conditions and performance of the company.
He said the union's first report was submitted to Government last Friday and "will be given the due consideration it deserves."
He added: "Even if we have other ideas, the pressing challenges surrounding this major state enterprise demand immediate action whether it is strengthened management, improved accountability, restructuring of its shape and business model, geared towards increased production, better productivity and sustained profitability.
"The Government will act as is necessary and I appeal to all involved to see our circumstance as a national prerogative requiring reason and maturity. We can rise to the occasion as we prescribe our own bitter medicine which must be so distilled to take us to a place of economic good health, peace and social justice."
Dr Rowley said the company is T&T's major oil producer, accounting for more than half of total production, is a net earner of foreign exchange of approximately $250 million a year and is also an important contributor to tax revenues, as well as a guarantor of the country's energy security.
"For many years, high international oil prices masked a range of fundamental weaknesses in Petrotrin's operations. Among the main structural problems were a steady decline in domestic oil production, from 64,000 bpd in 2006 to 42,000 bpd in 2016, low productivity, escalating manpower costs and steadily increasing operational and capital costs, due to inadequate controls, questionable management practices, ageing assets and infrastructure," he said.
In addition, the company employs more than 5,000 workers and its annual wage bill accounts for close to per cent of its total annual operating costs. Dr Rowley described this payroll ration is "exceptionally high".
These challenges were compounded by a significant increase in the company's debt burden and the decline in crude oil prices, combined with an ongoing decline in refinery margins and declining local oil production resulted in a decrease of more than 50 per cent in Petrotrin's revenue, from $37 billion in 2012 to $16 billion last year.
He said high debt servicing costs and high operating expenditures, combined with these other factors resulted in the company registering a net loss of $819 million for the 2015 financial year and the projected loss for 2016 is $600 million.
Dr Rowley warned that failure to fix Petrotrin, which he described as "an integral and major part of our destiny", would leave the country vulnerable.
"We have averted a major disruption which would have considerably worsened our situation and for that, on your behalf, I must thank all who were directly involved and their advisers.
"However, let us not for one minute believe that we have dealt with or have solved the problem. Comforting as it is, as we exhaled, it is not even the beginning of the end,"he said.