Curtis Williams
OGJ Correspondent
Workers at Trinidad and Tobago's state-owned Petrotrin have gone on strike, effectively shutting down the company's 165,000-b/d refinery and stopping its 45,000 b/d crude oil production from fields both on and offshore.
The strike is likely to have a major impact on the Caribbean fuels market since Petrotrin is the largest supplier of refined products to the area. It also exports gasoline to the US East Coast and to parts of Latin America.
The workers are protesting a lack of increase in salaries for the last 4 years. However the company has said it is in a poor financial position exacerbated by low oil prices and poor refining margins.
In a memo to workers, Petrotrin Pres. Fitzroy Harewood noted that revenues had declined by more than 50% from $6 billion (TTD) in 2012 to about $2.5 billion (TTD) in 2016. This, coupled with the ongoing decline in refining margins and lower oil production, resulted in the company realizing 2 years of net aftertax losses.
"We are also faced with a large debt obligation, low investment rating, and rising capital and investment costs, including what is required for asset integrity improvements," Harewood said. "Moreover, within the past year, the company has had to use government guaranteed loans to finance some of its working capital and trade financing needs."
Petrotrin is paying interest on a $750-million bond at about $90 million/year to complete in 2022. The company also is contractually required to continue to pay the interest payments on its $850-million bond and a bullet payment of $850 million in August 2019.
Harewood also noted that it needed to raise capital for drilling and investment activities including completing the ultralow-sulfur diesel plant and scheduled plant maintenance turnarounds in the refinery at a rate of $300 million (TTD)/year to reduce exposure to asset integrity risk, for abandonment liabilities, and to maintain and increase crude-oil production.
Petrotrin took ownership of the Point a Pierre refinery from Texaco Inc. at a time when the refinery was the fifth-largest in the world processing 375,000 b/d. The refinery played a crucial role in providing fuel for the allies in World War II.
The company has had to spend huge sums to upgrade the facility including construction of a gasoline optimization plant and an ULSD plant.
