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The Oilfield Workers’ Trade Union (OWTU) is seeking a partner to lease the Pointe-a-Pierre refinery as a joint venture.
This fresh development comes weeks after Prime Minister Dr Keith Rowley gave the OWTU first dibs at purchasing the refinery and they refused, saying it belonged to the nation and not a private holder.
Speaking to the union members and Petrotin employees at the La Joya Complex, St Joseph, yesterday, however, OWTU president General Ancel Roget seemed to have a change of heart as he outlined an alternate plan to shutting down the refinery. He listed the lease arrangement as his second option.
“Now the OWTU is being totally committed to keeping the country’s sole refinery in operation and is confident of its viability. We are prepared to work with reputable businesses and investors in a joint venture to lease the Pointe-a-Pierre refinery,” Roget said to resounding applause from the gathering.
“Any type of arrangement that we enter into, that arrangement must see assets remaining in the hands of the people and benefiting the people.”
He said the lease arrangement would keep the refinery running and avoid a costly restart.
“The assets of the refinery remain in the state-owned company Petrotrin, as different from the sale of the assets to some buyer. Example, as a complete refinery, or as individual refining units and/or as scrapped plant and equipment,” he said
He said their plan was to prevent the cannibalisation of the plant. The lessee in this arrangement, he said, would take possession of all the increased crude, all 67,000 barrels.
“It will now find its way to the refinery, guaranteeing job security,” he said.
The Government, he said, would not have to spend any money in this lease arrangement. As part of its first option, the union is also proposing a restructuring of the US$850 million bullet payment owed by Petrotrin next year to keep the company alive.
Despite the Government’s firm stand that the refinery will be shut down by the end of the year, Roget seemed to think his alternate plan would find favour with the powers that be.
The main contention between the union and the Government is the company’s inability to service a massive US$850 million bullet payment due by August 14, 2019.
“Ask the current bondholders to refinance for a 3-5 year period with interest rate pegged to US five years treasury bonds yields,” Roget said.
“It is against the background of a well ordered Petrotrin. You take a lower interest loan to pay off the debt over a longer period.”
He said the Petrotrin workers could also buy back the bonds with a 10 per cent to 15 per cent monthly salary contribution.
“Now that is not a pay cut, that is a contribution,” he said.
He said pension funds and investment in the credit union can also help rescue the company, as it relates to the overhanging debt. This was one of the six critical areas the union explored to save the company from closure, he said.
“We are suggesting that the Government’s plan (to shut down the refinery) has created panic amongst the global markets and bondholders,” Roget said.
He said the yield rose sharply to 14 per cent as investors could not understand how the shutdown of the refinery would help service the billion-dollar debt.
“They are nervous because when they examine what has been proposed as revenue, it’s very very sketchy,” he said.
The union is also calling for a ramping up of Petrotrin crude oil production in order to make the refinery more viable.
“When we ramp up the production of indigenous crude we would import less. The margins will be greater,” he said.
Roget said Minister of Energy Franklin Khan talks about the reduced local production but there were many unexplored options to increase local crude levels. He said once more indigenous crude was produced, the country would be more insulated from currency fluctuations.
“The same board arrived at the same position in its February presentation to Parliament,” Roget said.
The union also proposed to have stakeholder agreement on the appointment of the board of directors as part of a reorganised internal structure.
“The Government must not hold the exclusive right to choose their friends and financiers, business interests to the board,” he said, adding the State company should be accountable to the Parliament.
During the presentation, Roget said he examined both the Lashley and Solomon report but never saw any directive to shut down the company.
He said even when chairman Wilfred Espinet was before the Joint Select Committee (JSC), there was never any talk of closing down the refinery and dismissing the workers.
“On all of those occasions, there was never any talk of shutting down the refinery and sending all the workers home. Absolutely no mention anywhere at all,” Roget said.
He said the same Espinet-led board painted a “glowing picture” of Petrotrin’s future to the JSC back in February.
“Who are these experts, these persons who advised the PM and what is the nature of that advice that would allow a Prime Minister to take a decision that would wreak havoc on the citizens of T&T?”
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