OWTU proposes lease-to-own option for Petrotrin refinery
Another plan has been introduced to try to rescue the beleaguered Petrotrin oil refinery.
The Oilfield Workers' Trade Union (OWTU) said during a media briefing on Wednesday that they have approached the board of Petrotrin and government to present a lease-to-own plan for the refinery, which will possibly save the jobs of thousands of workers.
OWTU president Ancel Roget said he is confident that the plan, which was produced with the help of international private investment firm Sunstone Equity Nv, can succeed.
MAK England, a commodities firm with operations in the UK, the US and the UAE, has also joined the proposal, with plans to provide crude oil and managerial expertise for the refinery.
“We are going to announce a plan that would be for the benefit of Trinidad and Tobago. Based on the research we have done…we would have taken out of those experiences a type of model that we feel confident would succeed.”
“We have come to a place, a very safe and confident place where we are sure, once our plan is implemented, the country will benefit.”
“We have responded to the Prime Minister’s offer of owning the refinery. Our response to that is not to own it, because our philosophy is what belongs to the people must be owned by the people. On the basis of that…we have fashioned our proposal that we are going to put before the Board and its chairman," he said.
He said the plan is not to own the company but to enter into a lease arrangement with an option to own at the end of the lease, adding that there will be many different options for the public and public institutions to take part in the plan.
Roget said a letter was sent to chairman Wilfred Espinet last Wednesday, requesting a meeting to present the proposal.
Roget said the media briefing was necessary in the interest of transparency to appraise the public of its proposal.
“Our proposal of a lease will ensure that all of the jobs will continue, those jobs will be saved…and it will be operated in a most efficient way but consistent with the union’s plan of restructuring,” he said.
Van Dyke: Petrotrin refinery a 'profitable asset'
CEO and Managing Director of Sunstone Equity Nv, John Van Dyke, was invited by the union to provide a financial plan that would appeal to the board and government.
Van Dyke said the shutdown of the refinery will affect not just Trinidad and Tobago but the wider Caribbean and said the refinery is a very valuable asset.
He also warned of wider consequences throughout the Caribbean if the refinery is shut down.
“You don’t just put a project like this together in a couple of weeks or even months. These projects are very large and they have consequences on all sides. I don’t think anyone is talking about the impact this will have on the wider Caribbean.”
“Trinidad and Tobago has the lowest fuel rates in the Caribbean. Those rates would cease to exist if you no longer have a Petrotrin that is producing it for you. The government may not necessarily agree with you because they like to subsidise things, but from an economic perspective that’s something we should talk about,” he said.
Van Dyke said the Petrotrin refinery is ‘very profitable’ but said government should assess where the leakage of funds is going, which he said is ‘in the billions’.
“The refinery is very viable. We all know what is happening in Guyana, we all know they do not have a refinery. We also know in Suriname, they have a small refinery but the prospect of discoveries on their coasts…is in the realm of 90 percent. This would have an impact on the future of your oil industry.”
He mentioned that the Haitian government as well as the Barbados government, which imports oil products from Trinidad and Tobago, are also supportive of keeping the refinery open.
Van Dyke said the sale of the refinery might only result in 10-30 percent of its asset value, however the plan his company proposed should ensure that citizens would retain at least 50 percent of the refinery’s value.
“If you were to purchase a refinery of this nature…it wouldn’t be unusual to see…in the realms of 10-30 percent of the asset value would be an acceptable start.”
“The model we have put together will ensure that not only will the people receive more than 50 percent of the asset value, it will also receive all of the taxes from the jobs which are going to be saved,” he said.
Van Dyke added that the refinery will also ensure the generation of hard currency which is needed at this time.
He said the plan entails a capital lease where the refinery will eventually be owned by the corporation that would be installed to oversee operations.
He said the ownership would entail a payment that would be agreed on by both parties but said he could not confirm the details until the plan was presented to the board and government.
“This is not just a project to save an oil refinery. This is a project that is looking towards the future to grow the assets of the refinery. We all know green energy is the future, we have…major companies looking at this area…that see the viability of this entity."
Van Dyke said ‘extensive discussions’ were held with Morgan Stanley but ‘unfortunately they have been also hired by another group that is also looking at ravaging your asset’.
“I would like to assure you and the people of Trinidad (and Tobago) that this is a very viable project and you should not let go of it so easily,” he said.
An injunction filed recently by OWTU to halt the issuing of severance letters by Petrotrin was struck down by the Court of Appeal.
On October 13, press advertisements announced that two new companies, the Heritage Petroleum Company Limited and the Paria Fuel Trading Company, would be replacing Petrotrin.
Information on the boards of directors of these new companies has not yet been made available to the public.
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