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Politics, business don’t mix

Friday, September 28, 2018

Last week, Petrotrin chairman Wilfred Espinet hosted a news conference at which he tried to ease increasing concerns about the extent of the job losses likely at the company. He also gave reasons why his board and the Rowley administration were convinced closure of the Pointe-a-Pierre was the best decision for the company.

Much of the news conference was spent on the extent of the cuts, confirming what the T&T Guardian had reported the Sunday before—that all the workers at the state-owned energy company will be sent home.

The latter had been predicted by the Oilfield’s Workers Trade Union (OWTU) but Petrotrin’s board and the government never explicitly explained that they would be sending home all the workers; workers who would then have to compete with everyone else for the 800 jobs to be created in the new exploration and production company.

It is understandable why so much time was spent on the numbers. After all, in an effort to soften the blow, the company tried to couch the decision to reflect the closing down of just the refinery and a reduction in the overall number in exploration and production. They cleverly tried to play with the numbers in a way that made it appear that the 800 workers in exploration and production will be former Petrotrin workers who would move seamlessly into the new company. This, of course, proved to be false and led to the mass confusion that followed.

From the start I have maintained that we have not been given enough information to determine if this is the best strategic decision for the company and the country. Even if we were to accept the government’s argument, Espinet’s news conference failed to answer some fundamental questions:

• Is it the plan of the government to have a new state enterprise to replace Petrotrin?

If so, where is the debt going to reside from the present Petrotrin?

• Will this new company be saddled with the Petrotrin debt that we are told is in excess of $12 billion?

• What about the legacy and decommissioning costs? Who pays for that?

• In this plan for a new company, what is the targeted lifting cost?

• Is there a plan for a partner to buy into the new exploration and production company?

• What is going to be put in place to protect the new company from the political directorate so it does not return to the free-for-all that occurred for so many years?

There are two major parts to this Petrotrin issue.

The first is the financial challenges of the company and the action that saves it. This also involves the lives and communities that will be hurt by the government’s move.

The second part is the future of the company. Most experts admit that Petrotrin sits on significant reserves and potential. However, there are huge costs to turn that potential into profits. The reality is: Petrotrin simply does not have the capital and the technology to maximise return.

We have to find a partner for the company and the quicker the government and Espinet say that clearly, the better it will be for all of us. That is not to say the company or its assets should be given away in a fire sale. However, we cannot continue to bury our heads in the sand and hope for the best.

The country should be having a conversation about how to protect Petrotrin and other state enterprises from becoming nothing but an extension of the political directorate.

Let the failure of Petrotrin teach us a lesson, that politics and business don’t mix.


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