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Trinidad and Tobago’s state oil firm Petrotrin is ending its oil refining business effective October 1, in response to hefty losses due to the cash it has been spending on crude oil imports, the country’s government said on Tuesday.
Petrotrin will cease oil refining operations at Pointe-a-Pierre, and will redesign its Exploration and Production (E&P) business in a bid to cut the losses it has amassed in recent years. The restructuring process will affect around 2,600 permanent jobs—the redesigned E&P business will employ some 800 workers and all 1,700 jobs in refining will be terminated, Petrotrin and the government say.
“Petrotrin is no longer producing enough oil to operate the Pointe-a-Pierre refinery efficiently. We are producing approximately 40,000 barrels of oil a day and the refinery operates at a capacity of 140,000 barrels a day, so we have to go to the market to buy about 100,000 barrels of oil to make up the shortfall. This results in a net loss in foreign exchange,” Petrotrin chairman Wilfred Espinet said in the statement.
Over the past five years, Petrotrin has lost a total of about US$1.19 billion (8 billion Trinidad and Tobago dollars). The company has US$1.78 billion (12 billion TT dollars) in debt and owes the Government of Trinidad and Tobago more than US$445 million (3 billion TT dollars) in taxes and royalties.
At present, the firm needs a cash injection of US$3.7 billion (25 billion TT dollars) just to stay afloat, and even if it had that money, the company would still be losing US$297 million (2 billion TT dollars) a year.
Petrotrin will phase out refining and start importing gasoline, diesel, aviation fuel, and other refined products the country needs—estimated at around 25,000 barrels of oil equivalent a day—and will export all of its crude oil production.
The Oilfield Workers Trade Union (OWTU) reacted angrily to the news, with union head Ancel Roget saying that “The proposal they have for Petrotrin is madness...we disagree with that and we reject that outright.”
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.