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Eyes on crime, economy, Petrotrin as PM addresses the nation
Almost a year ago, on January 11, 2017, Prime Minister Dr Keith Rowley addressed the nation about the poor financial state of energy company Petrotrin. At that time, he said it could not be business as usual with the state-owned company because it was already a drain on the Treasury.
Petrotrin is once again expected to be in focus when Dr Rowley speaks to the nation in a live broadcast at 7.30 this evening, just days after he met with directors of the company and received a report on plans for its restructuring. The PM is also expected to address the issue of rising crime—the murder toll hit 493 at the end of 2017 and already, in just six days, the murder rate has reached 17.
The economy and job losses are also expected to be addressed. The industrial relations climate in T&T is also expected to come into focus. The National Trade Union Centre, during a new conference on Thursday, called on the Government to settle all outstanding issues affecting the labour sector, including outstanding negotiations.
At the start of 2017, there was the threat of a strike at Petrotrin as the Oilfields Workers Trade Union (OWTU), led by Ancel Roget, pushed for salary increases for workers, rejecting a three per cent offer for the 2014-2017 period.
Petrotrin officials said it could not agree to a salary hike as revenue had declined by as much as 50 per cent between 2012-2016.
Government intervened and the threat of a three-month strike was averted, with the union agreeing to a five per cent wage increase.
Petrotrin, the country’s major oil producer, accounts for more than half of the country’s total oil production of about 72,000 barrels per day and is a net earner of foreign exchange. The company is also an important contributor to tax revenues and a guarantor of the country’s energy security.
However, in recent years, cash flow difficulties have resulted in arrears of payments of royalties and taxes to the Treasury of approximately $1.2 billion. Due to declining earnings it had received government guarantees in 2016 for short-term loans of up to US$230 million in order to continue operating and meeting basic financial obligations.
Petrotrin's annual wage bill for its 5,000 employees is close to $2 billion—approximately 50 per cent of its annual operating costs.
In March, Prime Minister Rowley appointed a seven-member committee chaired by Permanent Secretary in the Ministry of Energy Selwyn Lashley to review Petrotrin's operation. The committee submitted its report four months later, recommending that the company be broken up into three different areas: Exploration and Production, Trinmar and Refining and Marketing.
By year’s end, the Petrotrin board, now chaired by businessman Wilfred Espinet, was still conducting its review of the committee’s report.
There have been other significant developments at the energy company in the past year. In July, after two years at the helm, Andrew Jupiter resigned as chairman citing personal reasons. He was replaced by Espinet in mid-September.
At around that time, the company’s Internal Audit Department detected an $80 million overpayment for oil supplied to the company by contractor A and V Oil and Gas from its Catshill Field.
The audit indicated that between January to June 2017, Petrotrin paid for close to 350,000 barrels of oil which it never received.
Details of the internal audit were first made public by Opposition Leader Kamla Persad-Bissessar at a political meeting in early September when she called for the resignation of Energy Minister Franklin Khan over what she called the “fake oil scandal”.
Investigations into that matter are ongoing. Petrotrin has cancelled its contract with A and V.
Petrotrin president Fitzroy Harewood has tendered his resignation for “personal reasons”. It takes effect next month.
—with reporting by Rosemarie Sant
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