Cabinet selects OWTU company to run Petrotrin refinery
A company owned by the Oilfield Workers Trade Union (OWTU) has been named the preferred bidder to own and operate the Pointe-a-Pierre refinery.
Patriotic Energies and Technologies Co Ltd, a company wholly-owned by the OWTU, won the bid to purchase the Guaracara Refining Company Limited and Paria Fuel Trading Company Limited with a US$700 million offer.
Finance Minister Colm Imbert made the announcement during Friday’s sitting of Parliament.
Patriotic in its proposal offered upfront cash consideration of US$700 million.
It was the only company of the three companies shortlisted – the other two named as Beowulf Energy and Klesch – to do so.
Patriotic's proposal indicated upfront cash of US$700 million for the refinery assets plus US$300 million for the non-core assets of legacy PETROTRIN, including the Augustus Long hospital. However, the non-core assets were not offered for sale by Government.
Beowulf offered a US$42 thousand monthly lease over a 15-year term while Klesch’s proposal indicated the only payment to Government would be through taxes.
The Union-owned company was selected as the preferred bidder based on the following terms and conditions:
a) That Patriotic be given one month to present to the Evaluation Committee a satisfactory and comprehensive work plan on how it intends to complete the process going forward with respect to the following key deliverables:
i) confirmation of its ability to finance the purchase and operation of the refinery
ii. a draft Sales and Purchase Agreement (SPA) and various other Commercial Agreements inclusive of Crude Handling, Domestic Fuel supply, Natural Gas supply, Product Offtake, and Transition Support;
iii. a finalised Business Plan that addresses other key deliverables inclusive of the provision of a guaranteed, reliable and seamless supply of refined petroleum products to Trinidad and Tobago and the Caribbean region, ensuring the long term viability of the refinery, and reducing its carbon footprint;
iv. a statement of any fiscal incentives or tax concessions required from the Government of Trinidad & Tobago; v. an approach to any historical environmental liabilities;
vi. a Refinery Start-up plan which involves any necessary additional work inclusive of the Refinery Refurbishment plan and the Terminal start-up plan;
vii. a plan for the supply of petroleum products during the transition to full operationalisation by Patriotic of the refinery, inclusive of the finalisation of an MOU with Trafigura PTE Ltd;
viii. a suitable staffing plan, inclusive of senior management;
ix. proof of qualification to engender the startup and performance enhancement processes for the new business as well as the evaluation of growth opportunities to deliver solutions that integrate information, analytics and insight, to solve client challenges at all points along the energy value chain; and
x. approval from the Board of Directors of Patriotic for the definitive terms and conditions of the proposed transaction.
Imbert noted that Patriotic will be granted a three-year moratorium on all payments of principal and interest, towards the purchase of the refinery and a further 10 years, at a fair market interest rate, to complete the payment of the sum of US$700 million it has offered for the refinery.