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Thursday, July 3, 2025

Business leaders, economist support OWTU to reopen refinery

by

Andrea Perez-Sobers
63 days ago
20250430

An­drea Perez-Sobers

Se­nior Re­porter

an­drea.perez-sobers@guardian.co.tt

Busi­ness groups and one econ­o­mist see the re­open­ing of the Petrotrin re­fin­ery as a step in the right di­rec­tion with a lo­cal en­ti­ty.

On Mon­day, dur­ing the Unit­ed Na­tion­al Con­gress (UNC) gen­er­al elec­tion vic­to­ry speech, prime min­is­ter-des­ig­nate Kam­la Per­sad Bisses­sar vowed to re­open the Pointe-a-Pierre re­fin­ery, which was closed by the pre­vi­ous ad­min­is­tra­tion in 2018.

A UNC in­sid­er told Busi­ness Guardian that the aim is to work with the Oil­field Work­ers Trade Union (OW­TU) to restart the re­fin­ery.

The OW­TU pre­vi­ous­ly un­suc­cess­ful­ly bid to ac­quire the re­fin­ery through its com­pa­ny Pa­tri­ot­ic En­er­gies and Tech­nolo­gies Com­pa­ny Ltd.

A rep­re­sen­tatve of one of the com­pa­nies that was short­list­ed in the most re­cent bid told the Busi­ness Guardian that it would cost be­tween US$800 mil­lion to US1 bil­lion to restart the re­fin­ery.

Econ­o­mist Dr Justin Ram be­lieves that it was an er­ror to shut down the re­fin­ery com­plete­ly, with­out any plan to re­open it.

He said Petrotrin as it was, need­ed to be re­struc­tured as its work­force was too large, which was cost­ing tax­pay­ers.

“I would have hoped that when the last gov­ern­ment shut it down, that it was meant to be a re­struc­tur­ing, not just to be this whole­sale clo­sure of the re­fin­ery, and then for T&T to im­port fu­els for do­mes­tic use and for re-ex­port, I don’t think that is what we want,” Ram said.

He not­ed that it is im­por­tant that the re­fin­ery be run ef­fi­cient­ly, and that the new en­ti­ty pro­vides rev­enues to the gov­ern­ment.

Ram out­lined that the Gov­ern­ment might ini­tial­ly have to think about pro­vid­ing some fis­cal con­ces­sions to al­low the new in­vest­ment time to de­vel­op and be­come a prof­itable en­ti­ty.

“These are things that we’re go­ing to have to look at, but I think gen­er­al­ly it’s an idea that I sup­port and it should nev­er have been shut down in the first place as far as I’m con­cerned.”

Asked whether he thought it was a good idea to let OW­TU’s Pa­tri­ot­ic En­er­gies op­er­ate the re­fin­ery, as op­posed to Niger­ian en­er­gy com­pa­ny Oan­do PLC which was an­nounced as the suc­cess­ful bid­der in March, Ram said hav­ing a lo­cal en­ti­ty that can put for­ward a pro­pos­al that is vi­able, by all means, and, be­cause it’s im­por­tant for T&T eco­nom­i­cal­ly, a lo­cal en­ti­ty is need­ed.

“I don’t know this Oan­do en­ti­ty very well, but I do know the OW­TU. The OW­TU has been in­volved in the oil and gas in­dus­try for a long time. But I’m sure that not on­ly with­in their mem­ber­ship, they know peo­ple who can as­sist them in do­ing this. So, by all means, I think too of­ten, we sort of negate lo­cal en­ti­ties from do­ing things,” Ram dis­closed.

One of the things the econ­o­mist sug­gest­ed is that the new gov­ern­ment should con­sid­er set­ting up a reg­u­la­tor that would mon­i­tor pro­duc­tiv­i­ty and pro­duc­tion ef­fi­cien­cies.

“The rea­son why I say that is be­cause a lot of peo­ple will say, why give it to a lo­cal en­ti­ty? They are go­ing to have this mo­nop­oly here. That can lead to in­ef­fi­cien­cies,” he point­ed out.

One for­mer Petrotrin di­rec­tor said the re­fin­ery can be giv­en to the OW­TU, on the con­di­tion that the gov­ern­ment does not put a cent in­to it and the trade union’s in­vestors fund the en­tire project.

Fur­ther, the for­mer of­fi­cial said the OW­TU com­pa­ny must be held li­able for any ac­ci­dents that oc­cur in the com­mu­ni­ty and not the tax­pay­ers.

The for­mer di­rec­tor stressed that the re­fin­ery would need a sub­stan­tial in­jec­tion of cap­i­tal to start it up.

“In oth­er words, you are go­ing to need hun­dreds of mil­lions of dol­lars to start that re­fin­ery once more. The ques­tion is where are you go­ing to get it from? Is the union go­ing to be able to do it? A lot of these things sound very good to peo­ple be­cause, oh, we’ll open the re­fin­ery, we’ll do that. As it is, we al­ready have a sub­stan­tial num­ber of state en­ter­pris­es that are los­ing mon­ey,” the for­mer board mem­ber dis­closed.

They not­ed that the then Petrotrin was los­ing $2 bil­lion a year and with the re­struc­tur­ing that took place in 2018, Her­itage Pe­tro­le­um Com­pa­ny, post­ed af­ter-tax prof­it of $940.27 mil­lion for the year end­ed Sep­tem­ber 30, 2024, a 36.4 per cent de­cline from the $1.47 bil­lion from a year ear­li­er.

“That is the dif­fer­ence. You want the com­pa­ny to be mak­ing this rev­enue year­ly and not los­ing with a top-heavy work­force. The re­fin­ery at this stage, over the sev­en years it has been closed, is go­ing to be ex­treme­ly ex­pen­sive to start again. You’re go­ing to be spend­ing as much mon­ey as a new re­fin­ery. So al­most every­thing in there is go­ing to have to be tak­en over and done over as new.”

Busi­ness lead­ers wel­come promised re­open­ing

San Fer­nan­do Busi­ness As­so­ci­a­tion pres­i­dent Daphne Bartlett said the promised re­open­ing of the re­fin­ery is ma­jor since this coun­try would have saved US$740mil­lion per year in the im­por­ta­tion of fu­el and the pur­chase of the byprod­uct bi­tu­men for road re­pairs.

“Our neigh­bour Guyana is one of the largest pro­duc­ers of oil and we could re­fine their oil with prop­er ne­go­ti­a­tion. Tremen­dous em­ploy­ment would be cre­at­ed and it would cer­tain­ly lessen the in­ci­dence of crime,” Bartlett said.

Fyz­abad Cham­ber of Com­merce pres­i­dent Ang­ie Jairam high­light­ed that with the re­open­ing of the Pointe-a-Pierre Re­fin­ery, this coun­try can of­fer a va­ri­ety of ben­e­fits across eco­nom­ic, so­cial, and en­vi­ron­men­tal di­men­sions.

She not­ed by re­fin­ing crude oil lo­cal­ly, T&T can en­hance its self-suf­fi­cien­cy in fu­el pro­duc­tion, po­ten­tial­ly re­duc­ing de­pen­den­cy on im­port­ed fu­els and sta­bil­is­ing lo­cal fu­el prices.

Al­so, Jairam stat­ed that the re­open­ing of the re­fin­ery may en­cour­age ad­di­tion­al in­vest­ments in the en­er­gy sec­tor and be­yond, aid­ing the coun­try’s ef­forts to di­ver­si­fy its econ­o­my away from a heavy re­liance on a sin­gle com­mod­i­ty.

Giv­ing his in­put, chair­man of the Con­fed­er­a­tion of Re­gion­al Busi­ness Cham­bers (CR­BC), Vivek Char­ran said the re­fin­ery has laid dor­mant for some time so the ini­tial in­vest­ment to restart and re­fur­bish may be sig­nif­i­cant. Char­ran said it ap­pears the union may be giv­en the nod to run the re­fin­ery but they will need the ad­di­tion­al in­vest­ment to do that. He ques­tioned whether there would be po­ten­tial part­ners.

“If the re­fin­ery is re­opened and prof­itable it will en­rich the fence­line com­mu­ni­ties and pro­vide a source of em­ploy­ment. If we have po­ten­tial agree­ments with Guyana to re­fine oil and prob­a­bly lat­er with Suri­name then this could al­so help our for­eign ex­change sit­u­a­tion. But the re­fin­ery must be prof­itable or else we run the risk of rev­enue be­ing used to sup­port a loss-mak­ing com­pa­ny which in the long run will do more harm than it will ben­e­fit us all,” Char­ran de­tailed.

Jai Lelad­hars­ingh, co­or­di­na­tor of the CR­BC, who was al­so in sup­port, said by re­vi­tal­is­ing the Pointe-a-Pierre re­fin­ery, T&T could strength­en its po­si­tion as a re­gion­al en­er­gy hub, at­tract­ing trade and in­vest­ment from neigh­bor­ing coun­tries.

He in­di­cat­ed that this move holds sig­nif­i­cant po­ten­tial ben­e­fits across mul­ti­ple sec­tors.

“By care­ful­ly man­ag­ing its op­er­a­tions and ad­dress­ing en­vi­ron­men­tal and so­cial con­sid­er­a­tions, T&T can lever­age this op­por­tu­ni­ty for sus­tain­able de­vel­op­ment and sus­tain­able eco­nom­ic growth,” he added.


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