State-owned Petrotrin is a key player in the economy of Trinidad and Tobago, and what happens with the company is everybody’s business.
As the sole refinery in the country and the provider of the fuels that keep people and goods moving on the nation’s roads and on our seas, the future of Petrotrin is of direct interest to all members of the national community but its importance goes far beyond just fuelling the nation.
The sustainability of the company has direct implications for our macroeconomic situation. Concerns about the financial viability of Petrotrin – and its heavy debt burden – directly affect the overall confidence of international investors in Trinidad and Tobago, as well as our international ratings.
Petrotrin also has an important role to play in the availability of US dollars. Petrotrin imports significant volumes of crude oil from various international markets, including Gabon, Norway and Russia, to process through the refinery, with the products being sold on both the domestic and export markets. Crude oil is the country’s biggest dollar value import item. If, through increased domestic production, Petrotrin is able to reduce the volumes of oil it imports while maintaining its exports of products, it will be able to significantly increase the amount of US dollars available in Trinidad and Tobago.
Petrotrin is a very important source of tax revenue for the government, and could be more so if it manages to increase oil production. Increasing domestic crude production will not only increase the amount of tax revenue paid directly to the government from the upstream, it will also help with the profitability of the refinery. The more domestic crude that Petrotrin puts into the refinery, the better the refining margins and the better the chance of the refinery being profitable (and hence paying more taxes to the government).
The company is key to any short-term effort to reverse falling national oil production. While deepwater exploration has the potential for significant new oil production in the longer term, the reality is that any more immediate increase in oil production is likely to come from the mature acreage under the control of Petrotrin – both onshore and in the Gulf of Paria.
Increasing crude oil production should be a major objective for both the country and the company. This means that what happens in the company, and how it is able to secure capital to invest in new production, is everybody’s business.
In his national budget presentation, the Minister of Finance announced that Petrotrin was exploring opportunities to find a joint venture partner to invest in crude oil production from Trinmar acreage. He announced that there would be discussions with the Oilfields Workers’ Trade Union (OWTU) about these possible plans. While the OWTU is one important stakeholder in the company, they are not the only important stakeholder. The national community has a direct interest in the future of the company and all citizens need to inform themselves about the company, the issues it faces and how these can be overcome.