BP creates a new paradigm

BP Upstream chief executive Bernard Looney emphasized the company’s long-term commitment to Trinidad and Tobago during a meeting with government ministers at head office in London.

Looney said: ‘BP values our long-term partnership with Trinidad and Tobago. We have been the largest investor in the country’s upstream sector – investing over US$6 billion in the last five years alone – and are committed to continuing to take our business forward. In the past two years we’ve started up three new Upstream major projects in Trinidad and recently approved the development of another two.’

BP Trinidad and Tobago started production from the Angelin gas project in February this year and late in 2018 sanctioned the development of the Cassia Compression and Matapal projects. BPTT has been the most successful explorer in shallow water acreage offshore Trinidad, discovering around four trillion cubic feet of gas resources since 2012 and has a continuing exploration programme, including wells in both shallow and deep water being drilled in 2019.

Looney, with BP’s Upstream chief operating officer regions William Lin and regional president Claire Fitzpatrick, welcomed the opportunity to advance discussions with the government, including plans to maximize production from BPTT’s resource base and recent results in its infill drilling programme.

The behemoth’s track record of success provides a strong foundation for advancing opportunities to further develop its Trinidad business:

‘We continue to be confident in the Columbus Basin and I’m excited by the work being done by our team in Trinidad and Tobago to maximize production and create cleaner and more efficient methods to develop resources.’

“Current work includes development of a new concept for future platforms being piloted for the Cypre development that is expected to significantly reduce the cost of developing resources as well as reducing carbon emissions. The Cypre project is targeting final investment decision in 2020. If the pilot in Trinidad is successful in unlocking marginal resources, the design may have the potential to be applied in other regions worldwide.”

Claire Fitzpatrick said: ‘We had a fruitful meeting, discussing current issues and updating the Prime Minister on our activities over the short, medium and long term. Our exploration programme, for example, will continue in 2019, as well as work on our two sanctioned projects, Cassia Compression and Matapal.’

BPTT, the largest producer of natural gas in Trinidad and Tobago, accounting for about 55 percent of national production, continues to make substantial investments in its business as gas continues to bubble into its acreage.

The Cassia Compression facility will be located 57 kilometres off the south-east coast of Trinidad. The platform will have a throughput capacity of 1.2 billion standard cubic feet of gas a day (bscfd). The jacket will be fabricated in La Brea, Trinidad and the topside structure in Altamira, Mexico. First gas from the facility is expected in 2021.
The Matapal project will develop the gas resources discovered in 2017 with the Savannah exploration well. The project will be a three-well subsea tie-back to the existing Juniper platform. With production capacity of 400 million standard cubic feet of gas a day, first gas from Matapal is expected in 2022.
The Cypre project is based on the Macadamia discovery in 2017. The project is progressing through BP’s project approval process with the aim of making a final investment decision in 2020.

BP to sanction Cypre project in 2020

IOC BP is targeting a final investment decision for the development of its Cypre project off Trinidad and Tobago for 2020.

The Cypre project aims to develop the Macadamia gas discovery announced by BP back in June 2017, when BP found gas at its Savannah and Macadamia wells.

The Savannah – renamed Matapal – has already been sanctioned, envisioning a three-well subsea tie-back to the existing Juniper platform.

For the Cypre project, BP will not follow the Matapal route. A statement coinciding with the visit at head office in London said BP is developing a new concept for future platforms for the Cypre development.

WHITE KNIGHTS TO THE RESCUE
Shell to pay $2.5 bn

T&T could earn as much as $10 bil­lion over the 9 nine years from a new deal with Roy­al Dutch Shell.

The En­er­gy Min­is­ter told Par­lia­ment that mega investor Shell agreed to pay gov­ern­ment $2.5 bil­lion by the end of 2019 in USD to the sum of US $397 mil­lion. “The out­come of these phase 1 ne­go­ti­a­tions, with Shell, re­sult­ed in an agree­ment to pay the gov­ern­ment ap­prox­i­mate­ly, US$397m to the end of 2019 and the par­ties are mov­ing in­to phase 2 of the ne­go­ti­a­tions which sur­round the re­struc­tur­ing of At­lantic LNG.” Like the BPTT pay­ment last year to gov­ern­ment of $1 bil­lion,. Fudging facts of the mega-deal, the Min­is­ter at­tacked the Op­po­si­tion and the En­er­gy Cham­ber for fearing state intervention to re-open the LNG con­tracts with ma­jorsl, after re-ne­go­ti­a­tion lifted rev­enue. “Both the UNC and … the En­er­gy Cham­ber ac­cused the Gov­ern­ment of be­ing an­ti-in­vest­ment and pur­su­ing ac­tion that would con­sti­tute a vi­o­la­tion of the sanc­ti­ty of con­tracts ex­e­cut­ed with in­ter­na­tion­al oil com­pa­nies.” Be­tween 2010 and 2014 loss from trans­fer pric­ing prac­tices was es­ti­mat­ed at US$6 bil­lion an­nu­al­ly.

In April 2018 gov­ern­ment fired the starting gun in sep­a­rate dis­cus­sions in Lon­don with Shell and BP to ad­vance the mat­ter of im­prov­ing the coun­try’s po­si­tion. “Aris­ing from these dis­cus­sions, both Shell and BP agreed to es­tab­lish em­pow­ered teams to en­gage the gov­ern­ment sep­a­rate­ly on LNG mar­ket­ing arrange­ments, gas-re­lat­ed is­sues and oth­er im­por­tant is­sues raised by the com­pa­ny.”

On the agree­ment signed in The Hague, over the next nine years the coun­try will collect im­proved rev­enue of $6.4 bil­lion from At­lantic Trains 2,3 and 4 and should Train 1 con­tin­ue to op­er­ate, could earn $800 mil­lion in ad­di­tion­al rev­enue an­nu­al­ly. It was agreed to use the new Train 1 for­mu­la for fur­ther in­vest­ment which will pro­vide in­creased rev­enue to Gov­ern­ment. Sub­ject to pro­ject­ed avail­able fa­cil­i­ty ca­pac­i­ty, it will be en­ti­tled to utilise up to 50 per cent of the North Coast Ma­rine Area (NC­MA) in­fra­struc­ture ca­pac­i­ty, with no li­a­bil­i­ty for any his­toric cap­i­tal costs. There will al­so be an eq­ui­table shar­ing of op­er­a­tional costs and any new cap­i­tal cost.

Shell projects will add nat­ur­al gas to the coun­try’s over­all sup­ply. Es­ti­mat­ed gov­ern­ment earn­ings will ex­ceed $22 bil­lion over the life of the fields. In keep­ing with its in­vest­ment pro­gramme, Shell has em­barked on the de­vel­op­ment of its Col­ib­ri and Bar­racu­da projects. For the Bar­racu­da project 5C, first gas is pro­ject­ed for 2020. First gas for the Col­ib­ri project, block 22 and NC­MA 4 is pro­ject­ed for 2021. The gov­ern­ment and Shell agreed that gas sup­plied from these Pro­duc­tion Shar­ing Con­tracts (PSCs) and any new sanc­tioned PSCs for the pro­duc­tion of LNG will be based on the new Train 1 Freight on Board (FOB) for­mu­la. An es­ti­mat­ed US$3.3 bil­lion will ac­crue to the Gov­ern­ment from these two projects.

The spot­light on en­er­gy was held against a back­drop of in­ad­e­quate eco­nom­ic re­turns from nat­ur­al gas re­sources, revealed in the Gas Master Plan by UK Consultants Poten and Partners. Gov­ern­ment wel­comes in­vest­ment and the re­source own­er, the peo­ple of T&T, expect a fair eco­nom­ic rent It buildt the plat­form of mu­tu­al re­spect and the abil­i­ty to sit as equals with the multi­na­tion­al com­pa­nies. “Through our ef­forts, this is now clear­ly un­der­stood by the In­ter­na­tion­al Oil Com­pa­nies (IOC’s) and has trans­lat­ed in­to the eco­nom­ic gains that we have col­lec­tive­ly achieved. These ben­e­fits will ac­crue to the peo­ple ……”

Shell Upstream continues to focus on delivery and financial performance and is expected to continue generating robust cash flow for decades to come. It has a strong development funnel of projects that offers long-life, resilient growth opportunities. The Integrated Gas business is expected to attract investment to maintain and grow its positions through competitive options for future development. Natural gas and liquefied natural gas are expected to continue to experience strong demand as the world tackles climate change, poor air quality and population growth. Downstream continues to deliver strong financial performance due to highly integrated refining, trading and marketing operations, premium products, as well as competitive growth in the Chemicals business. Strong brand and customer reach will continue to be a differentiator for Shell and underpin growth in its Downstream businesses. Shell continues to develop its Power business. The company plans to seek new opportunities to grow this business as the role of electricity increases in the global energy system and consumers’ needs evolve. The returns Shell achieves will drive the pace of growth in Power.

Ben van Beurden said, “All this adds up to a forward-looking strategy that ensures Shell is well-placed to continue to deliver a world class investment case and thrive in the energy transition.”

Shell Australia sees more opportunities for floating liquefied natural gas projects, but not necessarily like its $17B Prelude FLNG operation off Australia, which recently shipped its first cargo . Pipeline costs, improving the FLNG technology and management of early and late-stage production at a field all would determine whether FLNG might be viable for other gas developments.

Atlantic Train One Turnaround Track

ATLANTIC Train One avoided being mothballed as shareholders chose a turnaround (TAR) maintenance schedule, significantly scaled back from the original maintenance and upgrade plan – the Life Extension Project – from 110 days to 40 days.

TAR is due to start in October but Atlantic hopes that Train One will be back up by the end of the year. The short-term goal is for the plant to run at least until the end of the first quarter of 2020 when another assessment will be made based on the availability of gas to supply the train. The commercial issue needs to be resolved.

After BPTT confirmed disappointing results from infill drilling programmes in the Columbus Basin would have a material impact on forecast production, especially in 2020 and 2021, challenges to the gas supply to Train One after 2019 are expected. Government was relaxed about the potential fallout. In the short term, the country’s prospects might be better. After the BPTT announcement, the Finance Minister said gas could be diverted to the other three trains and other downstream petrochemical plants, from which the country actually gets better returns.

Train One initially had a lifespan of 20 years, due to expire in April this year. Government had successfully negotiated a five-year extension, including better pricing terms for the government.

Shell is the major shareholder in Train One, followed by BPTT, PRC investors CIC and the State NGC. Government has no stake in Trains Two and Three but has an 11 per cent stake in Train Four.

Point Fortin powerhouse

In Phase two of negotiations with shareholders, restructuring of the four LNG trains into a single unit would be the focus. In a systemic threat, like a bolivarian blunderbuss, government will build its shareholding throughout Atlantic, instead of launching a feasible feel-good energy policy of divestment, the only panacea to unleash potential and turn the tide. Big Gas and the rest of the private sector keeping the market afloat, dread a monopoly scenario of a tax splurge on more state intervention, disastrous bureaucracy and hindrance to growth , in a vicious circle of nationalisation repeating the Petrotrin spiral racing to the bottom.

Big Energy’s Crown Jewel

LNG cash cow Atlantic resumed operations “shortly” after the 4-train plant ground to a halt in a power outage. The unplanned shutdown occurred as the mega- gas consortium, led by titans BP and Royal Dutch Shell, is recovering from a 3-year decline in production caused by a natural gas shortage
LNG consumes over 50% of natural gas production and was identified as the sector attributable for substantial value loss. Shell is the majority off-taker in the LNG Trains with 68 % in Train 2, 73% in Train 3 and 51.1% in Train 4. Its LNG contract for Train 2, expires in 2022, Train 3, in 2023, and Train 4 in 2027. BP is the other significant shareholder in Trains 2, 3 and 4.

No LNG imports from US riding the epic shale boom

President Trump announced the first shipment of LNG from the Cameron LNG Export Facility in Louisiana. US frack technology improved in the last five to seven years and competition makes the price less attractive.
The US is building new downstream plants like fertilizer, in direct competition to local products as the shale gas boom disrupts the local downstream industry, reeling from gas shortages. Government acknowledged the changing world market with the US, once the primary export market for Atlantic LNG, now a net exporter but is not considering importing liquefied natural gas from the US.

“Wherever the price is right you look at it. … We want to be able to sell to the market place, be competitive, be attractive to investment and therefore able to sell. That is why we are … encouraging those who are with us to stay with us because the market is changing. We have to build these relationships to make sure we stay in that international business. We can’t tell the US who to sell to or not to sell.”

Un­com­pet­i­tive nat­ur­al gas prices threaten sus­tain­abil­i­ty of the down­stream petro­chem­i­cal sec­tor. Nat­ur­al gas short­ages and price led to re­duc­tion in methanol and am­mo­nia pro­duc­tion and loss of jobs . Without a change in pol­i­cy the sec­tor will reach a point of no re­turn with col­lapse of Point Lisa In­dus­tri­al Es­tate.

NGC chairman takes foot off gas

G. Brooks resigned as chairman and director of SEC National Gas Company and its subsidiaries, including TT NGL where he addressed the annual general meeting . He will also leave other state boards and re­signed from the board of Na­tion­al He­li­copter Ser­vices Ltd. The former vice president of the Law Association will return to law with his own family practice. With an honorary professorship in innovation and entrepreneurship by the University of the West Indies, he will assist the UWI in this field, critical to the diversification thrust.
NGC acknowledges the contribution of Prof. Brooks to its growth and transformation and wishes him well in future endeavours. He intends to turn his attention to building a family legal practice, the focus of which will include mediation and arbitration.

He thanked the Government for the privilege to serve in these capacities over the three and a half years. In thanking management and staff of NGC companies, he indicated that their commitment and support enabled progress on critical issues including certainty of gas supply, improved profitability, accelerated completion of upstream and downstream agreements, substantial reduction of multi-billion dollar claims against NGC, successful execution of TTNGL IPO and APO and strategic regional and national expansion. Good governance and accountability characterised the operating fabric of these companies.

Before assuming chairmanship of NGC in 2015, Brooks retired as chief operations officer of the Ansa McAl Group of Companies.

His main achieve­ment was his abil­i­ty to re­duce claims against the com­pa­ny, $4.2 bil­lion, to man­age­able pro­por­tions. His key chal­lenge was ne­go­ti­at­ing new gas sales con­tracts. When he as­sumed of­fice in Oc­to­ber 2015, NGC was embroiled in ma­jor law suits from com­pa­nies on the Point Lisas In­dus­tri­al Es­tate for lack of pro­vi­sion of gas. During nat­ur­al gas cur­tail­ment, the down­stream sec­tor confronted NGC with lit­i­ga­tion be­cause the state en­ter­prise had gas agree­ments with up­stream pro­duc­ers that lacked penal­ties for fail­ure to pro­vide the ag­gre­ga­tor NGC with their con­tract­ed quan­ti­ties of gas.
UNC MP Roodal Mooni­lal queried if the res­ig­na­tion posed added chal­lenges for NGC giv­en headwinds in the en­er­gy sec­tor and asked when a new chair­man might be ex­pect­ed.

The Min­is­ter replied, “.. one of the most im­por­tant state sec­tor po­si­tions is chair­man of NGC and that po­si­tion will be filled in the short­est or­der with the per­son with the re­quired com­pe­ten­cies….there’s enough suc­ces­sion,.. enough depth at the NGC to fill the space…. the ne­go­ti­a­tions that the Prime Min­is­ter cham­pi­oned … abroad (re­cent­ly) were Gov­ern­ment ne­go­ti­a­tions. Positions on state boards are vol­un­tary for peo­ple will­ing to bring their skills, tal­ent and ex­per­tise to bear in the per­for­mance of na­tion­al ser­vice—it’s not a job…. He brought to the task, ex­pe­ri­ence in law , ne­go­ti­a­tion and com­mer­cial eval­u­a­tion. Gov­ern­ment and the En­er­gy Min­istry want to thank him for a well served time as chair­man of NGC.” His resignation is effective from June 30.

His mammoth re­mu­ner­a­tion pack­age from 2015 at­tract­ed con­tro­ver­sy when Gov­ern­ment—in Par­lia­ment in 2016- con­firmed he earned $82,500 month­ly in board fees and trav­el­ al­lowances from the ten en­er­gy boards he l­ed and served. His pay comprised $73,000 a month from board fees for the ten boards and $9,500 a month in trav­el­ al­lowances. After the outcry from the op­po­si­tion leader who con­demned the sit­u­a­tion of mul­ti­ple boards and fees, al­leg­ing Brooks was the PNM’s “Calder Hart, the Fi­nance Min­istry re­viewed and reduced his salary from NGC boards from $82,500 to $69,000 and at his request, dis­con­tin­ued his trav­el­ al­lowances. The scandal shone a spotlight on powerful public pay packets devouring the tax cash pile after the meltdown at Petrotrin where managers earned $45,000. Presumably he will enjoy a generous state pension. Ministers will pocket princely pensions of $427,120 a year, up from $328,240 with gratuity of $1,922,040. For the Attorney General pension rose from $82,056 to $106,776 with gratuity of $640,680.

Odyssey of Geocracy

A sweetheart deal in May put a spring in the steps of high-spenders flying high to Europe and USA to swoop on top brass from the energy majors with legally sound company operations in the 7-island archipelago. The main prize was an agreement for LNG sales from Atlantic Train One, a fillip to returns for TT, stabilising the short to medium term outlook in energy, near terminal decline in 2015.

In a watershed moment, a new formula was created to apply to Trains Two, Three and Four, avoiding leakages under the old formula. The rescue package will be used when agreements are signed. Citing the geology duo to charm multinationals to keep the country on investment schedules, the PM crowed “… there are very few countries … where the government can speak to the technical people in the companies about their seismic lines and downhole pressures.” Banging the drum aimed to convince companies that while government understood investors sought returns, the country must “make a good living… not as a mature area of exploration but where exploration is still attainable.” The Energy Minister, the second geologist in the campaign will advise Parliament of the milestone masterplan.

Critique and Kudos

Company confidentiality is key
In a sector accustomed to plaudits, the PM was rebuked for breaking taboo on high-level overseas meetings with operators. In the traumatic aftermath of Petrotrin, philanthropic capitalists, spooked by the heebie-jeebies gave a stark warning to preserve commercial advantages during negotiations for TT to pocket better earnings.

Drunk on a therapeutic, tax- funded boreal blitz at plush metropolitan offices in Britain and Holland and a marathon in deluxe Texas towers, bullish Rowley revealed the Row in a debate on a bill that lets the Finance Minister know Central Bank staffing and structure. These details are outside confidential banking transactions whose sanctity is like deals in the energy sector. “We… walk a very thin line between informing the public and preserving our commercial confidentialities. ..After the Minister of Energy made his statement …….. of our negotiations …… I have received ….. a complaint that what we said to the Parliament is in breach of the confidentiality they expect … I hope that means something to those of you, especially on the Opposition who were in government and understand what these things mean.”

Fixated on the opposition scapegoat, trapped by fundamental security weakness, he said demands for disclosures damaged the country. “When you think we did not give you enough information, what we have given has already caused disquiet. Don’t try to score points at the expense of destroying the country’s commerce that gives us a living. They said to us, ‘We don’t want to create any new template that others may want to use. We operate all over the world. If we make a good arrangement with you, going beyond what we would normally do because of the circumstances in TT and your environment, then it ought to be covered by the confidentiality of the clauses.’”

Amid gun fatigue as murders exceed 280, he asked why would TT shoot itself in the foot demanding that commercial confidentiality such as gas price be published. “We’ll stand where it makes sense in protecting the interest of all the people of TT.”

Losing friends and winning megadeals

The leader of the Con­gress of the Peo­ple referred to the 10-day junket to BP, Shell, BHP and EOG, asking if it was nec­es­sary for the Prime Min­is­ter, En­er­gy Min­is­ter and Na­tion­al Se­cu­ri­ty Min­is­ter to be at the ne­go­ti­at­ing ta­ble. “They have tech­nocrats in the Min­istry of En­er­gy who are all com­pe­tent. … there was a to­tal mar­gin­al­i­sa­tion of the Min­istry of En­er­gy. There is no need for politi­cians …..any­one with a po­lit­i­cal ap­pointee get­ting in­volved in ne­go­ti­a­tions.” Such a move weak­ens gov­er­nance. Re­spon­si­bil­i­ty for en­er­gy ne­go­ti­a­tions is in the hands of tech­nocrats. The role of min­is­ters is to set guide­lines and make poli­cies. Un­der her stew­ard­ship as En­er­gy Min­is­ter, during ne­go­ti­a­tions her job was to en­sure that the in­tegri­ty of the process re­mained in­tact. “But the ac­tu­al de­ter­mi­na­tion, analy­sis and rec­om­men­da­tions would come from the tech­nocrats. They would sit with their coun­ter­parts in those multi­na­tion­al com­pa­nies and they will ne­go­ti­ate.” The on­ly time a min­is­ter ought to get in­volved was if there was a flaw with the ne­go­ti­at­ing process. “Too many times … we give the im­pres­sion that the multi­na­tion­als are able to in­flu­ence politi­cians in­to these ne­go­ti­a­tions and that has got to stop.”

While the Energy Minister was a geologist in the petroleum industy, the PM, a hard-rock geologist who did not discover a barrel of oil or a cubic foot of gas, spent 32 years as an arch-bureaucrat. Negotiations with uber brands require soft leadership skills in diplomacy, communication, strategic planning, project management plus technical and professional experience. With gifts that give back, liberal democratic investors, aware of risk and reward, play nice for the country to benefit fairly from investment, lock, stock and barrel. Generous goliaths, experts in economic prudence, stable and resilient, avoid getting hands burnt betting on future stength in cherished world-class petroliferous locations. Since 1962, populists in pole position embraced political cunning to determine industrial strategy, buoyed by energy, the barometer of the economy. Robots do voters a disservice by obsessing about byzantine process instead of policy, pussy-footing around crime in a fear culture, risking prosperity badmouthing watchdogs. If opposition parties combine for a makeover and listen, a new order will ease the squeeze of the balisier curse and revive a beacon of decentralisation, privatisation and innovation to liberate the population from a cruel economic delusion while coffers brim with cash. Structural change will end dominance of a reckless regime, raking in revenue, sleepwalking with a rap sheet on spending, law and order, employment, red tape and growth, in a flawed democracy yielding to a dangerous cocktail of punitive policies and crises on the horizon.

Financing fuel

New RBL board member, Vincent Periera. .Re­pub­lic Bank Lim­it­ed an­nounced that Vin­cent Pereira joined its Board of Di­rec­tors ef­fec­tive Ju­ly 1, 2019. Pereira , cur­rent pres­i­dent of BHP Trinidad and To­ba­go, a po­si­tion he has had since 2005, has over 35 years’ ex­pe­ri­ence in the en­er­gy sec­tor in Trinidad and To­ba­go and in the Unit­ed States of Amer­i­ca. In his iconic role, Pereira was re­spon­si­ble for the safe and re­li­able op­er­a­tions and for the growth of a lega­cy busi­ness in Trinidad and To­ba­go.   Over the pe­ri­od 2005 to the present, he laid the groundwork for the suc­cess­ful ex­e­cu­tion of two ad­di­tion­al ma­jor off­shore up­stream de­vel­op­ment projects along with the firm’s seam­less tran­si­tion from an oil fo­cus to a sub­stan­tial gas pro­duc­er and sup­pli­er..Through­out this tenure, he suc­cess­ful­ly managed the ex­ter­nal stake­hold­er en­gage­ments re­quired to en­sure the long-run vi­a­bil­i­ty of the com­pa­ny. Pri­or to join­ing BHP T&T, Pereira was a se­nior ex­ec­u­tive at BPTT, directing dif­fer­ent as­pects of the busi­ness in Trinidad and To­ba­go.

Heritage Petroleum digging deep 

HERITAGE Petroleum Co Ltd is dilling its first well under its own name in Point Fortin. Drilling of the onshore infill development well, FC466 will target a depth of 3,000 feet. The new well will boost the existing field’s production by 70 to 100 barrels of oil per day.
Heritage land leader, Derek Lall said the well was an important milestone for the company. “We believe that there are still significant hydrocarbon reserves to be developed within the acreage. Heritage will continue seek the most efficient ways of extracting these reserves.”

The company plans to drill another six to eight wells by the end of the year. Heritage was incorporated at the end of last year and was vested with the exploration and production assets of Petrotrin when the SOC was restructured last year. Petrotrin, the country’s largest oil producer, with 40,000 barrels of oil per day, two thirds of output, made a comeback as Heritage which is expected to rally, increasing activity to boost pivotal production and build a solid foundation for growth.

Trinidad Petroleum bumper bonds boost buffers

Trinidad Petroleum Holdings Ltd extended the deadline for bondholders to exchange their bonds for new securities. Flush with capital, the company had received approximately US$528.1 million of the principal amount of existing notes in the Exchange Offers. Since this exceeds $500 million, those who tendered their notes for the exchange on or after June 5 will not be able to withdraw from the offer, as per the terms and conditions outlined on June 6. Note holders who tendered after June 5 will also not be able to withdraw.

Due to holidays, the company extended the deadline to ensure everyone interested was able to take up the offer.

Since the company has crossed its threshold for the conversion it can now start the refinancing/bond reissue process. Those who decided not to take up the offer will be paid the difference in cash.

On May 31, TPHL announced it received US$720 million in term loans from a Cayman Islands-based syndicate of banks led by Credit Suisse for refinancing company debt. The loans would be guaranteed by subsidiaries Heritage Petroleum Ltd, Paria Fuel Trading Co Ltd, and Guaracara Refining Co Ltd. The new bonds, due in 2026, have an interest rate of 9.75 per cent. The first interest payment will be in September.

The company is refinancing its debt mountain, which includes these bonds, one for US$850 million due in August and a US$750 million bond in 2022, both incurred by predecessor Petrotrin to finance failed gas to liquid and ultra-low sulphur diesel plants.

In April TPHL announced an exchange programme to bondholders of the 9.75 per cent unsecured 2019 notes and six per cent 2022 notes, offering to exchange them for new 9.75 per cent secured 2026 notes. The 2019 bondholders could also exchange their notes for cash up to US$425 million, but that could be increased to US$600 million. That deadline was May 10. The company received a buy in for $130 million, leaving a difference of $720 million – the amount of the term loan.

Shareholders through advisor BroadSpan Capital initially rejected TPHL’s offer to refinance, disagreeing with some terms and conditions but they accepted amendments to the offer, including more transparency and discourse with bondholders for this new issue.

TPHL received US$415,655,000, or about 49 per cent of the outstanding notes for the 2019 bond, and US$112,476,000 or 60 per cent of the $187.5 million for the 2022 bond. The originally issued principal amount of the 2022 notes was US$750 million. At the launch of the Exchange Offers, those notes had been paid down to US$218,750,000, or about 30 per cent of the originally issued principal amount. Subsequently, a $31,250,000 amortisation payment made on May 8, 2019, brought the outstanding principal amount down to US$187,500,000, or approximately 25 per cent of the originally issued principal amount.

Whstleblower grills Minister

Bureaucratic antics continue in silos of inertia as the opposition scrutinised the Energy Minister.
Asked if US sanctions against Venezuelan companies affect TT importing fuels from PDVSA retail company CITGO, the Minister told senators that Paria Fuel Trading Company imports of refined oil for local consumption after closure of the Petrotrin refinery does not include oil produced by Venezuela SOC PDVSA.

“CITGO is currently not a supplier, nor is it a potential supplier of refined products to TT.” The question was based on false premises.  A heavy-handed Senate president disallowed a question by the Senator asking if the minister knew of a shipment of refined products from Charles Lake in Louisiana on October 13, 2018, on a ship High Mars bound for Port of Spain, which arrived at the Pointe-a-Pierre jetty on October 23, 2018.

The president disallowed his next question asking the minister if he is aware that CITGO was able to supply refined products which were loaded on High Mars that brought those refined products to TT in October last year. The minister denied any relationship between CITGO and the Government and the particular company that brings in refined product.

After the president disallowed the Senator asking the minister to categorically tell the Senate no relationship exists between CITGO and Paria, he vowed to raise the matter in a future motion on the adjournment and asked if Paria was overpaying for imports of refined fuel from BP.

The minister replied that it is the norm to pay a premium of 3 to 5 per cent above the referenced market price, due to commercial terms and reliability of supply. He denied the assertion that TT was buying fuel at a price that was one third higher than the world market price. “This is dangerous misinformation, as was the first question.”

The last cargo BP delivered to TT was February 13, their bid in the Government’s request for proposals having won against competitive rival bids. Disclosing the price would jeopardise the free market system of buying oil. When asked if Paria would never again buy oil from BP, he said their four-month contract to supply had now expired and other bidders won the new contracts. “BP could win again, but it is a competitive environment.”

Central Bank: Energy shows its mettle

The Cen­tral Bank June mon­e­tary pol­i­cy an­nounce­ment reports an en­er­gy-led re­cov­ery in do­mes­tic eco­nom­ic ac­tiv­i­ty dur­ing the first half of fis­cal year 2018/19. The gov­ern­ment’s deficit for the first half of the 2018/2019 fis­cal year was low­er than in the cor­re­spond­ing pe­ri­od last fis­cal year. The boost to nat­ur­al gas out­put from the Ju­niper project pos­i­tive­ly af­fect­ed down­stream pro­duc­tion of petro­chem­i­cals and liq­uid nat­ur­al gas (LNG). To­ward the end of the year, re­fin­ing out­put fell sub­stan­tial­ly as a re­sult of the clo­sure of the Petrotrin re­fin­ery amid main­te­nance-re­lat­ed pro­duc­tion stop­pages at some petro­chem­i­cal plants in the fi­nal quar­ter of 2018.

Nat­ur­al gas pro­duc­tion rose fur­ther in the first two months of 2019 with the com­ing on-stream of new gas from the An­gelin plat­form. LNG and petro­chem­i­cals out­put al­so in­creased while crude oil pro­duc­tion con­tin­ued to de­cline ow­ing to ma­ture acreage.

The spillover from the en­er­gy to the non-en­er­gy sec­tors ap­peared to be slow and some­what un­even in 2018, how­ev­er. En­er­gy prices dis­played pos­i­tive trends over No­vem­ber 2018 to May 2019. Strong sea­son­al de­mand over the win­ter months ac­count­ed for the rise in nat­ur­al gas prices (7.5per cent year-on-year) to US$3.16/mil­lion British Ther­mal Units (mmb­tu) over the pe­ri­od.

Un­em­ploy­ment rate in­creased to 4.8 per cent in 2017 even as the labour mar­ket par­tic­i­pa­tion rate al­so de­clined as peo­ple left the job mar­ket as a re­sult of dif­fi­cul­ty in ob­tain­ing work. A year-on-year rise in re­trench­ment no­tices filed with the Min­istry of Labour in 2018 and ear­ly 2019, sug­gest­ a fur­ther slack­en­ing of labour mar­ket con­di­tions.

In­fla­tion con­tin­ued to be low and sta­ble in ear­ly 2019 due to low in­ter­na­tion­al food prices and mod­er­ate do­mes­tic de­mand. Head­line in­fla­tion stood at 1.2 per cent and con­struc­tion sec­tors boost­ed growth in 2018.

Con­sol­i­dat­ed pri­vate sec­tor cred­it, which had been ex­pand­ing mod­er­ate­ly in 2018, dipped in March 2019.

Re­gion­al­ly, in ear­ly 2019 Bar­ba­dos out­put suf­fered from fall-offs in con­struc­tion and oth­er non-trad­ed sec­tors . Fol­low­ing some tight­en­ing in the lat­ter part of 2018, glob­al mon­e­tary and fi­nan­cial con­di­tions have eased since the be­gin­ning of 2019 as ma­jor cen­tral banks kept mon­e­tary pol­i­cy un­changed or have im­ple­ment­ed fur­ther ac­com­mo­da­tion mea­sures

The Bank has con­tin­ued to con­duct open mar­ket op­er­a­tions in light of chang­ing mar­ket con­di­tions.

Low­er fis­cal in­jec­tions over No­vem­ber 2018 to May 2019 rel­a­tive to the pre­vi­ous sev­en-month pe­ri­od (April to Oc­to­ber 2018) re­sult­ed in the Bank in­ject­ing a net amount of $4.2 bil­lion in liq­uid­i­ty in­to the fi­nan­cial sys­tem through net ma­tu­ri­ties of OMOs. Fur­ther­more, sales of for­eign ex­change by the Cen­tral Bank to au­tho­rised deal­ers in­di­rect­ly with­drew liq­uid­i­ty from the sys­tem. Liq­uid­i­ty lev­els over the pe­ri­od were low­er com­pared to the pri­or sev­en-month pe­ri­od, which led to a rise in dai­ly in­ter­bank bor­row­ing; how­ev­er, the in­ter­bank rate re­mained un­changed.

The lo­cal for­eign ex­change mar­ket re­mained tight de­spite an in­crease in au­tho­rised deal­ers’ for­eign cur­ren­cy pur­chas­es from the pub­lic. Over No­vem­ber 2018 to May 2019, both pur­chas­es and sales of for­eign ex­change by au­tho­rised deal­ers in­creased when com­pared to the cor­re­spond­ing pe­ri­od a year ear­li­er.

CL Financial

ATTORNEYS for a CLF shareholder wrote to the Central Bank Governor Dr asking for a “clear and finite” timetable for the bank’s relinquishing of the group’s insurance arm, CLICO.

In a pre-action protocol letter, on behalf of Natural Energy Vehicle Infrastructure Corporation of TT (NEVICOTT), the client was concerned that the bank has not fulfilled its statutory obligations by relinquishing control of CLICO although the insurance conglomerate’s positive net worth was now in excess of $600 million and had been repaying its debts.

In June, last year, the governor said the bank would relinquish control of CLICO “as soon as possible.” “However almost one year hence, the bank is no closer to relinquishing its control of CLICO that it was when you uttered your comments almost one year ago and no recent indication has been given as to when, if at all, the bank expects to relinquish control of CLICO.”

NEVICOTT’s concern included “whispers” in the public domain of a proposed sale of the CLICO portfolio to SAGICOR. A court may “well find that the words ‘as soon as possible’ uttered one year ago are too vague and uncertain” to give comfort to CLF shareholders that the bank will fulfill its statutory obligations and release the now solvent CLICO, warning that the continued failure to handover the company to its shareholder was a clear breach of the bank’s statutory duty. NEVICOTT has given the Central Bank governor 14 days to provide a clear timetable as to when it will relinquish control of CLICO.

NEVICOTT has also, in a separate court action, filed an application before High Court judge Kevin Ramcharan seeking to put a stay on the further sale of CL Financial assets until the joint liquidators present audited financial statements. The shareholder has specifically asked for a stay of an August 2018 order authorising the disposition of Methanol Holdings Limited shares and an injunction to restrain the joint liquidators from soliciting purchasing the assets of CLF or the sale of any of the assets.

In its reply to NEVICOTT’s application, the joint liquidators have argued that there was no basis to grant the stay to stop the sale of Methanol Holdings and Holiday Inn as there was already a sale agreement in place for Holiday Inn which is due to be finalised in July and any stay may expose the company to a claim for damages if the transaction was not finalised.

In 2018, NEVICOTT wrote to the Minister of Finance, enclosing a letter of intent from a Middle Eastern investment bank that promised to raise US$2 billion on NEVICOTT’s behalf in order to pay off the debt owed to the Government by CLF, as a result of the 2009 bailout of the conglomerate.

NEVICOTT became a CLF shareholder when it purchased 5,878 ordinary shares from attorney David Hannays, and had to apply to the High Court to have the CL Financial shares transferred to it, as the liquidation process is under judicial control. In 2017, the Government filed a court action to have CL Financial placed in liquidation, following a threat by the group’s shareholders to hold a special meeting to take control of the company.

In the hearing of the application before Ramcharan, the joint liquidators have also argued that NEVICOTT has not provided proof of funds, adding that the letter to the minister spoke of the investment bank saying it could help raise the US$2 billion, but did not say it actually had the money. The debt owed by CLF was US$4.7 billion and the Government was only a 40 per cent creditor of the entire sum due and owing. Ramcharan will give his decision on NEVICOTT’s injunction application on July 9.

Icing on the cake for top investment location

The Trade Ministry reported that InvesTT won the award for “2019 Top Investment Promotion Agency in Central America and Caribbean ” at the World Forum for Foreign Direct Investment in Sydney, Australia. “InvesTT, the national investment promotion agency (IPA) and a state agency of the Ministry of Trade and Industry, continues to proudly maintain its rank amongst the best IPAs in the world.”

InvesTT received the internationally recognised award twice before, the first time in 2015, just two years after its establishment and the second in 2017.

Chairman Philip Knaggs, who collected the award on behalf of the IPA, described it as an important milestone for TT.

“Being ranked as the best IPA in the region clearly shows that our country has made great strides in creating a business environment that is attractive to foreign investors. TT is truly ‘Open for Business.. We actively seek and welcome investments from across the globe.”

InvesTT is involved in promoting the country’s investment opportunities, sourcing investments and growing GDP outside the petrochemical sector.

Recognition was also accorded to TT as a top investment destination. The country ranked as one of the top “Global Best to Invest” locations in the Caribbean.

US State De­part­ment

US State De­part­ment in their 2019 Traf­fick­ing in Per­sons Re­port placed the coun­try at Tier 2 with ‘F’ grade

Headless chickens in a shifting landscape

Three months af­ter Gov­ern­ment said that the Paria Fu­el Trad­ing Com­pa­ny was not for sale, it is con­sid­er­ing merg­ing the eight-month-old com­pa­ny with the Guaracara Re­fin­ing Com­pa­ny Ltd (GR­CL).

Paria, illogically split from Petrotrin , was cre­at­ed to sup­ply fu­el to the do­mes­tic mar­ket. The tank farm is linked to the Pointe-a-Pierre Re­fin­ery, moth­balled and trans­ferred in­to the cus­tody of GR­CL. The En­er­gy Min­is­ter revealed that GR­CL will most like­ly be leased to an in­ter­na­tion­al com­pa­ny. Bids for the ac­qui­si­tion were be­ing eval­u­at­ed and by Au­gust, Cab­i­net ex­pects to be pre­sent­ed with the best of­fer.

“But Paria and the re­fin­ery are con­nect­ed and when we do the analy­sis from the pro­pos­als, I said ..­..I will be sur­prised if any­body pro­pos­es any­thing … and is pre­pared to in­vest mon­ey in that re­fin­ery and leave the Gov­ern­ment with Paria to com­pete by im­port­ing fin­ished prod­uct …we have to wait to see what the re­fin­ery pro­pos­al is be­cause Paria is sim­ply trad­ing the fin­ished prod­uct from the re­fin­ery or the im­por­ta­tion in­to the re­fin­ery. It is the same stor­age tanks they have to use. If you have Paria as a sep­a­rate com­pa­ny im­port­ing fu­el, where are the tanks go­ing to come from for the com­pa­ny .. run­ning the re­fin­ery? When the re­fin­ery pro­duces diesel and gas, where are they go­ing to put it? “

De­fend­ing the de­ci­sion to .. cull. 4,700 work­ers, gov­ern­ment took the tough de­ci­sion to save the trea­sury from be­ing de­plet­ed. Had Petrotrin been al­lowed to con­tin­ue, it would have de­fault­ed on its loans, re­sulting in the coun­try be­ing down­grad­ed by in­ter­na­tion­al rat­ing agen­cies. This would have made bor­row­ing dif­fi­cult for the Gov­ern­ment as the coun­try would be sub­ject­ed to high-in­ter­est rates from cred­i­tors.

Corruption cannot be re­struc­tured away but Stan­dards and Poors gave the company an up­grade from a neg­a­tive rat­ing to sta­ble. Her­itage Pe­tro­le­um now has a BB rat­ing, two notch­es be­low in­vest­ment grade. As oil pro­duc­tion con­tin­ues, the com­pa­ny will at­tain an in­vest­ment rat­ing that will al­low it to bor­row with ease. It does not mat­ter who owned the re­fin­ery as the op­er­a­tions will re­sult in tax­es be­ing paid to the Gov­ern­ment. For years, Petrotrin had not paid any tax­es.

Refinery Fever consumes flailing OWTU

The Pointe-a-Pierre impasse leaves a bad taste in the mouth. The Oil­fields Work­ers’ Trade Union seeks clar­i­fication on pref­er­ence for a for­eign com­pa­ny in a bid to ac­quire the Guaracara Re­fin­ing Com­pa­ny,.
doomed with the name of a polluted river. At Para­mount Build­ing in San Fer­nan­do it sought the res­ig­na­tion of En­er­gy Min­is­ter Franklin Khan over state­ments at the meet­ing .“Is it a done deal?” The union has be­gun dis­cus­sions with its at­tor­ney.

Khan an­nounced that the re­finery would soon be trans­ferred to a new op­er­a­tor, unlike­ly be an “in­dige­nous”(sic) com­pa­ny . No lo­cal com­pa­ny could han­dle the size and com­plex­i­ty of Re­fin­ery. Bids were be­ing eval­u­at­ed. OWTU said that Khan has in­for­ma­tion unknown to the rest of the coun­try about a bid­ding process that is incom­plet­e. OW­TU, through re­cent­ly in­cor­po­rat­ed Pa­tri­ot­ic En­er­gies and Tech­nolo­gies Com­pa­ny Ltd, was among 50 bid­ders.

Fol­low­ing the an­nounce­ment of the future of Petrotrin, the PM said re­fin­ing as­sets would be a sep­a­rate com­pa­ny which OW­TU would have the first op­tion to own and op­er­ate on the most favourable terms.

OW­TU re­ject­ed the of­fer to pur­chase the re­fin­ery but met with for­eign in­vestors and in­cor­po­rat­ed its own com­pa­ny to bid for the re­fin­ery. Pa­tri­ot­ic was prepar­ing to in­ter­view ap­pli­cants for po­si­tions in the re­fin­ery from 4,000 ap­pli­ca­tions. The union was con­fi­dent in its bid for the re­fin­ery but since Khan’s state­ment it was in­un­dat­ed with calls from con­cerned cit­i­zens and for­mer work­ers.

“We find it to be very trou­bling that at the pub­lic fo­rum, the min­is­ter …(revealed) knowl­edge of a process that has not been com­plet­ed … Oil­fields Work­ers’ Trade Union has in­cor­po­rat­ed a com­pa­ny …Pa­tri­ot­ic En­er­gy to get in­volved in the bid­ding process and to ac­quire the re­fin­ery and all of the oth­er as­sets at Pointe-a-Pierre for the pur­pos­es of pro­vid­ing fu­el, en­er­gy se­cu­ri­ty and al­so rev­enue and for­eign ex­change for Trinidad and To­ba­go. We are in the process, but we are bound by … a non-dis­clo­sure agree­ment .. as part of the process that has a re­quire­ment for us to pro­vide cer­tain things. We are not to speak about that pub­licly. We are not speak­ing about what stage we are in the process, who are the mem­bers of our con­sor­tium. All of those things we are not sup­posed to speak about be­cause we are bound by a non-dis­clo­sure agree­ment.”

Row­ley did not re­peat or de­ny Khan’s state­ment. Putting the re­fin­ery in the con­trol of for­eign­ers is not in the in­ter­est of the coun­try. The claim that T&T did not pos­sess the tal­ent to op­er­ate a re­fin­ery of that size and com­plex­i­ty is in­sult­ing. Khan lacked the ex­pe­ri­ence in re­fin­ing, ex­plo­ration and mar­ket­ing of oil. Petrotrin con­tributed $60 bil­lion to the na­tion­al econ­o­my un­der the regime who ap­point­ed the late Mal­colm Jones to chair the board… the com­pa­ny em­barked on sev­er­al failed projects that led to sig­nif­i­cant debt, which con­tributed to its fi­nan­cial chal­lenges and even­tu­al clo­sure. OWTU chal­lenged Khan to a de­bate on Petrotrin’s down­fall and said that when tak­ing is­sue with work­ers’ salaries, he should com­pare them to his own and what he con­tributes to the coun­try for his pay.

Union in the lurch in a game of chicken

“Guaracara Re­fin­ing and ter­mi­nalling (stor­age) fa­cil­i­ties are very like­ly to be leased to a pri­vate op­er­a­tor. Very like­ly, an in­ter­na­tion­al op­er­a­tor be­cause there is no in­dige­nous ca­pac­i­ty to run a re­fin­ery of that size and com­plex­i­ty. We will be fo­cus­ing on Her­itage. ” The re­fin­ery will be re­opened un­der a new op­er­a­tor and work­ers re­trenched from Petrotrin and giv­en “at­trac­tive sev­er­ance pack­ages” would be re-em­ployed. This means that the bids of OW­TU and 50 op­er­a­tors were ruled out. The union which rep­re­sent­ed the for­mer Petrotrin work­ers was con­fi­dent that its bid to lease and op­er­ate the re­fin­ery would be suc­cess­ful.

The de­ci­sion to close Petrotrin saved the coun­try from be­ing down­grad­ed by in­ter­na­tion­al rat­ings agen­cies. The down­fall was a re­sult of bad in­vest­ments in the Gas Op­ti­miza­tion Project, the Ul­tra Low Sul­phur Diesel plant and the World Gas to Liq­uid plant. Petrotrin would have lost $2 bil­lion year­ly if it had been al­lowed to con­tin­ue. Petrotrin Trin­mar Op­er­a­tion ex-work­ers booed the Prime Min­is­ter as he en­tered the meet­ing in a strong­hold of the regime . For­mer oil work­ers and PEP members heck­led the Na­tion­al Se­cu­ri­ty Min­is­ter, demanding an ex­pla­na­tion on the shut­down of At­lantic’s Train 1. “.. They are ly­ing to the peo­ple. … po­lice are say­ing that… I am dis­rupt­ing the meet­ing. They’re not telling any­body what they are about to do where en­er­gy is con­cerned, they come to blame Kam­la. …. We can not strive…when the gov­ern­ment is fool­ing the peo­ple. They closed down Train 1 and Petrotrin and telling peo­ple to come and work for $10 and $15 per hour.”

Refinery mania

The energy minister told Parliament. about the LNG agreements.

He rejected union claims that he indicated the refinery in Pointe-a-Pierre could be operated by a foreign entity. OWTU attempted to create an issue where none exists. At no time was any specific company indicated or vaguely referred to. He never said the preferred bidder is known to the Government. He and the PM dealt extensively with justification for the restructuring of Petrotrin, in particular the need to get out of the refining business.

“We articulated the rationale to the nation for the new companies (Heritage Petroleum Company Ltd., Guaracara Refining Company Ltd, Paria Fuel Trading Company Ltd. and Trinidad Petroleum Holdings Ltd.). We outlined the optimistic and sustainable future ahead for the new company.” He and Rowley indicated interest from several investors in the refinery, provided an update on the bidding process and approximately when a preferred bidder would be identified. The meeting discussed purely policy issues.

Divestment of refinery assets is complex and part of a sophisticated process. He gave the assurance that this process ” is being conducted in the most transparent and ethical way possible and the final decision will redound to the benefit of the people of TT.”

ESTATE POLICE ASSOCIATION

EPA refuted claims that it was offered the job to protect the assets of defunct Petrotrin. EPA in 2018 warned the Trinidad Petroleum Holdings board of massive theft and loss of assets after the termination of estate police officers.

The Prime Minister was unaware of warnings but knew the EPA was offered the first opportunity to be responsible for securing the company’s assets. “And I am not aware that came to pass…“

EPA, having secured the compound prior to the shut down and built a rapport with the surrounding communities, were more than ready and able to protect the assets. “No such offer was made and if any such offer had been made, we would have taken the offer. We had a meeting … to rescind his decision to dismiss the EPA workers on November 28 last year.. two days before the shutdown of Petrotrin.”

Five companies, Guaracara Refining Company, Heritage Petroleum Company Ltd, Paria Fuel Trading Company, Petrotrin as a company to deal with legacy matters, were all placed into Trinidad Petroleum Holdings Ltd.

Given reports that over the past 6 months Heritage lost $20 million to thieves and saboteurs and spent $5 million to replace stolen or damaged equipment, Rowley said Heritage is upgrading and improving security systems to prevent or end “.. wanton misconduct …to harm the company.” Heritage improved fencing, installed CCTV cameras and maintained a security patrol system backed up by police and the Defence Force.

EPA officers are willing to secure the properties with their “institutional knowledge” under a new company. Surrounding communities, displeased with the closure of Petrotrin and the formation of new companies turn a blind eye to thefts but EPA officers can secure the items from scrap iron dealers profiting from stolen metal.

Restless union wrangles over refinery

Con­fi­dent in its bid to ac­quire the moth­balled Pointe-a-Pierre Re­fin­ery, OWTU awaits an­swers over the closure of Petrotrin. It was his­toric how many lies gov­ern­ment told about one is­sue. 6 months af­ter the SOC closed, the coun­try is yet to learn who rec­om­mend­ed clo­sure and how much was spent, giv­en the im­pact on the lives of 45,000 peo­ple, in­clud­ing busi­ness­es.

“When they an­nounced the clo­sure.. they claimed they got ex­perts to ad­vise, but they re­fused to tell the coun­try ex­act­ly who ad­vised them to close … The Lash­ley com­mit­tee said that they them­selves nev­er men­tioned clo­sure. There is no re­port to date any­where that rec­om­mend­ed the clo­sure of Petrotrin. The truth is that busi­ness through­out the en­tire south­ern part of the coun­try, ex­tend­ing as far as the south west­ern penin­su­la, have been ad­verse­ly af­fect­ed by the clo­sure. … busi­ness­es in Port-of-Spain and oth­er parts of the coun­try were al­so af­fect­ed be­cause these busi­ness­es pro­vid­ed ser­vices to Petrotrin.”

While… Min­is­ter Franklin Khan promised en­hanced sep­a­ra­tion pack­ages for the work­ers, the ma­jor­i­ty of work­ers had not been prop­er­ly com­pen­sat­ed. Some have not yet re­ceived any com­pen­sa­tion or sev­er­ance what­so­ev­er. In the case of tem­po­rary and ca­su­al work­ers, mat­ters are be­fore the In­dus­tri­al Court.

The ex­pen­di­ture for Petrotrin giv­en by the gov­ern­ment was wrong. Khan failed to tell the na­tion that the on­ly peo­ple who made $45,000 per month were in top man­age­ment po­si­tions cre­at­ed by both PNM and UNC gov­ern­ments.

The re­al rea­son for Petrotrin’s mis­for­tunes was the huge debt in­curred when for­mer chair­man Mal­colm Jones de­cid­ed up­on the failed World Gas To Liq­uids Plant. Jones con­tin­ued to plunge the com­pa­ny’s fi­nances fur­ther with high cost over­runs and long de­lays in plant con­struc­tions and plant turn­around.

Be­cause of the union’s in­volve­ment in bid­ding for the re­fin­ery through its Pa­tri­ot­ic En­er­gies and Tech­nolo­gies Co Ltd, they were bound by a non-dis­clo­sure agree­ment.

As regime and union show their true colours, unnecessary taxes bleed the public dry and citizens await the decision to lease or flog the splintered company.

Renewable energy by 2021

With­in the next two years, ten per cent of the coun­try’s elec­tric­i­ty will come from re­new­able re­sources. Ac­cord­ing to the Pub­lic Util­i­ties Min­is­ter by 2021 T&T must be­come more de­pen­dent on re­new­able en­er­gy be­cause of the Unit­ed Na­tions (UN) Paris Agree­ment for the low­er­ing of green­house gas emis­sions.

T&T be­came a sig­na­to­ry to the Agree­ment when it de­posit­ed the in­stru­ment of rat­i­fi­ca­tion on Feb­ru­ary 22, 2018, at head­quar­ters in New York. Gov­ern­ment is com­mit­ted to stick­ing to the terms of the Paris Agree­ment which calls for a glob­al ef­fort to low­er car­bon diox­ide (CO2) emis­sions to re­duce the ef­fects of glob­al warm­ing and to adapt to the ef­fects of glob­al warm­ing and cli­mate change.

Cos­ta Ri­ca an­nounced it would be the first na­tion in the world to be car­bon neu­tral by 2021. One of the most in­flu­en­tial fac­tors in their car­bon sta­tus is that 98 per cent of their elec­tric­i­ty comes from re­new­ables like hy­dropow­er, wind, so­lar, ge­ot­her­mal and bio­mass. The on­ly fos­sil fu­el used by Cos­ta Ri­cans is diesel.

The re­al­i­ty in T&T is dif­fer­ent. Ac­cord­ing to the World Bank, as of 2014 T&T used 7,134.03 kilo­watthours (kWh) per capi­ta. Com­pared to much larg­er Venezuela, with a per capi­ta con­sump­tion of 2,657.62 kWh, and Suri­name with a per capi­ta con­sump­tion of 3,631.86 kWh, lo­cal en­er­gy use is stag­ger­ing.

Cheap­er elec­tric­i­ty is to blame. Ac­cord­ing to a 2017 re­port by the En­er­gy Cham­ber, the gas boom and low elec­tric­i­ty prices ac­count for the high rate of elec­tric­i­ty con­sump­tion. It was part of a four-part se­ries, Un­der­stand­ing the Elec­tric­i­ty Sub­sidy, by the chair­man of En­er­gy Ef­fi­cien­cy and Al­ter­na­tive En­er­gy, .

43 per cent of e 400,000 house­holds us­ing elec­tric­i­ty wast­e it due to the state’s elec­tric­i­ty sub­sidy.

“Nu­mer­ous stud­ies have shown that sub­si­dies lead to waste­ful be­hav­iours and T&T is no dif­fer­ent. De­spite hav­ing three con­sump­tion cat­e­gories at var­i­ous prices, rough­ly 43 per cent of all house­holds in the coun­try fell in the high­est us­age cat­e­go­ry of >1000kwh. In ad­di­tion, the av­er­age bi-month­ly con­sump­tion of these house­holds in 2015 was rough­ly 2100kwh. Com­par­ing this lev­el of con­sump­tion to oth­er re­gions high­lights a star­tling re­al­i­ty; 43 per cent of homes in Trinidad and To­ba­go have a con­sump­tion lev­el that is on par with the av­er­age North Amer­i­can home, twice that of the av­er­age Eu­ro­pean home and three times the glob­al av­er­age. More­over, 70 per cent of all res­i­den­tial pow­er in Trinidad and To­ba­go is con­sumed by this 43 per cent which to some ex­tent il­lus­trates the lev­el of in­come in­equal­i­ty in the coun­try.”

In most cas­es, a high­er stan­dard of liv­ing ac­count­ed for greater con­sump­tion as cit­i­zens are able to pur­chase large ap­pli­ances with­out much con­sid­er­a­tion for how much elec­tric­i­ty those ap­pli­ances use.

“Over the last 15 years, dur­ing what some now term the gas boom, the stan­dard of liv­ing and lev­els of in­come in Trinidad im­proved great­ly and so did our elec­tric­i­ty con­sump­tion. How­ev­er, for many of us the de­ci­sion to pur­chase new A/C units, clothes dry­ers, wa­ter heaters, dish­wash­ers and ap­pli­ances may have been done in the ab­sence of en­er­gy ef­fi­cien­cy con­sid­er­a­tions. More im­por­tant­ly, low elec­tric­i­ty prices re­sult in the pop­u­la­tion giv­ing less crit­i­cal thought to over­all en­er­gy con­sump­tion, re­gard­less of whether or not ap­pli­ances are en­er­gy ef­fi­cient.”

RF­Ps were sent out for re­new­able en­er­gy. Gov­ern­ment is look­ing to­ward us­ing re­new­able sources of en­er­gy as it tries to stick to the Paris Agree­ment. Re­quests for Pro­pos­als (RF­Ps) by the Min­istry of En­er­gy closed on June 28. So far, the state has re­ceived a very promis­ing re­sponse to the RF­Ps.

“We are look­ing at re­new­ables, that’s for sure. The RF­Ps have got­ten a lot of good in­ter­est and when it clos­es on June 28, we will have to eval­u­ate all the pro­pos­als and make a de­ci­sion. We are al­so com­mit­ted, un­der the Paris ac­cord, to add ten per cent of our sup­ply in re­new­able by 2021.”

The min­is­ter could not say what type of re­new­able en­er­gy would be utilised to ac­count for this ten per cent as bids will have to be eval­u­at­ed and weighed against each oth­er. With T&T’s cur­rent pow­er pur­chase agree­ments (PPA), or elec­tric­i­ty pow­er agree­ment, the coun­try pro­duces more elec­tric­i­ty than it con­sumes.

“When com­par­ing Trinidad and To­ba­go with oth­er coun­tries, we have to re­mem­ber we have ex­tra en­er­gy that is not be­ing used. PPAs were pre­pared when we were look­ing at in­tro­duc­ing the smelter plant so where­as oth­er coun­tries are now try­ing to meet their ex­ist­ing de­mands, we have ex­tra.” The state has PPAs with five en­ti­ties in­clud­ing the Union Es­tate Pow­er Sta­tion which is state-owned. The T&T Elec­tric­i­ty Com­mis­sion (T&TEC) owns two—the Scar­bor­ough Pow­er Sta­tion and the Cove Pow­er Sta­tion. The oth­er two are Trin­i­ty Pow­er Lim­it­ed and Pow­er­gen’s Pe­nal and Point Lisas plants.

Gov­ern­ment will go slow with re­new­ables be­cause of the ex­cess on the mar­ket. “As we bring more en­er­gy on stream, we need to man­age the de­sire to bring more elec­tric­i­ty on the grid ver­sus what is present­ly there and if you don’t have de­mand for it, you will be pay­ing for some­thing that you can’t use. There will be a bal­anc­ing act, there is a cost to bring on new PPAs which you do not have the de­mand for.”

An­oth­er way to curb emis­sions from elec­tric­i­ty is for or­di­nary cit­i­zens to prac­tice en­er­gy con­ser­va­tion.

“En­er­gy con­ser­va­tion will re­duce the use of en­er­gy be­cause we will burn less nat­ur­al gas to pro­duce and if you are burn­ing less nat­ur­al gas, you are putting few­er emis­sions in the air. Get­ting peo­ple to use en­er­gy more ef­fi­cient­ly could al­so help in re­duc­ing the car­bon foot­print. We have to look at it from both sides, en­er­gy con­ser­va­tion and re­new­ables but what­ev­er we do, we have to be cog­nisant of our cur­rent ex­cess of elec­tric­i­ty.”

A magic bullet- save electricity

The Pub­lic Util­i­ties Min­is­ter told the En­er­gy Cham­ber En­er­gy ef­fi­cien­cy and Re­new­ables con­fer­ence that by con­serving 10 per cent of the gas it cur­rent­ly us­es T&TEC would save TT$100 mil­lion per an­num. If that gas is sold on the in­ter­na­tion­al mar­ket, this coun­try could earn an ad­di­tion­al TT$200 mil­lion per an­num, amount­ing to a to­tal of TT$300 million per an­num.

In its third year, this year’s theme was “In­dus­try col­lab­o­ra­tion for a low car­bon fu­ture.”

Gov­ern­ment is con­vinced that en­er­gy con­ser­va­tion is not on­ly the way, but it must be fa­cil­i­tat­ed and im­ple­ment­ed on a na­tion­al scale with some de­gree of ur­gency. Cul­ture is not one that places a high val­ue on con­ser­va­tion, es­pe­cial­ly ac­ces­si­ble and rel­a­tive­ly cheap re­sources like en­er­gy. “We, as a peo­ple, are of­ten slow to adopt ac­tiv­i­ties that will serve the greater good sim­ply be­cause it is the right thing to do.”

En­er­gy con­ser­va­tion and the re­duc­tion in green­house gas emis­sions have a di­rect im­pact on air qual­i­ty in a par­tic­u­lar ge­o­graph­i­cal lo­ca­tion.

Pres­i­dent and CEO of the En­er­gy Cham­ber Dr Thack­wray Dri­ver said T&T, like much of the Caribbean re­gion lags be­hind in en­er­gy ef­fi­cien­cy and re­new­ables. How­ev­er, T&T, has the po­ten­tial to ad­vance quick­ly if the right pol­i­cy choic­es are made, not­ing in­ter­est from both pub­lic and pri­vate sec­tors, or­di­nary cit­i­zens es­pe­cial­ly younger cit­i­zens. Con­cerns about the im­pact of hu­man in­duced cli­mate change are a strong dri­ving force be­hind this in­ter­est. “The dev­as­tat­ing hur­ri­canes we have seen in the Caribbean and last year’s flood­ing in Trinidad, have height­ened these con­cerns about cli­mate change. “Glob­al­ly there has been a re­newed fo­cus on hu­man in­duced cli­mate change, with a new gen­er­a­tion of ac­tivists com­ing to the fore and ac­tivist stake­hold­ers de­mand­ing clear ac­tion to re­duce car­bon foot­prints.”

Eco­nom­ics al­so led to in­creased in­ter­est in en­er­gy ef­fi­cien­cy and re­new­ables in T&T. “The short­falls in gas pro­duc­tion that have char­ac­terised Trinidad over re­cent years have fo­cused both pol­i­cy­mak­ers and the in­dus­try on mak­ing the best use of our nat­ur­al gas. From ear­ly 1970s through about 2010, the sto­ry of the T&T gas in­dus­try was es­sen­tial­ly about cre­at­ing more and more de­mand to al­low the coun­try to mon­e­tise its nat­ur­al gas.”

With a high­ly suc­cess­ful em­pha­sis on “pump­ing up the vol­umes” T&T per­haps missed the im­por­tance of us­ing those nat­ur­al gas re­sources ef­fi­cient­ly. In a gas con­strained set­ting, Dri­ver ad­vised that em­pha­sis be placed on the wise use of every mol­e­cule of nat­ur­al gas and fo­cus on max­imis­ing val­ue, rather than max­imis­ing vol­ume. “That al­so means find­ing al­ter­na­tive ways to gen­er­ate the en­er­gy we need to run our econ­o­my, in ad­di­tion to burn­ing nat­ur­al gas, hence the dri­ve for both greater ef­fi­cien­cy and re­new­able pow­er.”

WATER / ENERGY NEXUS

 At the launch of Savonetta Booster Station at Point Lisas, the Public Utilities Minister said Beetham Wastewater Treatment Plant was a wasteful and ill-conceived project that cost taxpayers almost $1 billion without producing one drop of water. Taxpayers must consider that as a loss. It would have cost an additional US$250 million (TT$1.9 billion) to continue the project to only produce 10 million gallons of water.

With funding WASA could get that amount of water at a cost $200 million or less. The investment was not salvageable. As WASA struggles to meet demand it can use some of the pipes from the discontinued project to help in pipeline distribution in other areas.

Since 2015, the National Gas Company has been weighing its option on how to recover the debt. It had awarded the contract to Super Industrial Services (SIS) for the design and build of the recycling plant, together with pipelines and water storage facilities. He questioned how NGC got involved in water production and could not state the company’s position on the debt recovery.

Taking the brunt of complaints of WASA’s inability to properly service customers, he said if WASA was able to get wastewater money, plus the $700 million owed by residential and commercial customers, infrastructure and consumption demands could have been more efficient.

“Fixing WASA is a process.” Repair of 1,500 leaks in the last four months and plans to fix at least 500 of the 1,100 still existing in the coming months, is being done at a tremendous cost. It was a priority to reduce leaks to get the limited commodity to customers and to bring storage capacity to international standards. Road rehabilitation was secondary. Storage capacity is 37 times lower than required with about 11,758 imperial gallons (igd) per person compared to international standards of 439,939 igd per person.

WASA’s director, programmes and change management, said the station will boost flows and pressure to customers in central and south west Trinidad who previously received a scarce and unreliable water supply. An estimated additional four million igd of water will be available to the San Fernando Booster Station. It is also a major component in the infrastructure upgrade required to provide a water supply to Caribbean Gas Chemical Ltd at Union Industrial Estate. $75 million was spent previously to connect a pipeline to the Mitsubishi plant at La Brea.

The Savonetta project which was executed by contractor UEM Inc, now Toshiba Water Solutions America Inc, at a cost of $39,097,789.04, started in June 2015 but was completed in April 2019 as the work was temporarily suspended from February 2016 to March 2017. WASA reduced the cost by using an in-house team of engineers who took over the project management that would have previously required the use of a supervisory consultant. WASA reduced the contract bill by over $150 million a year by using in-house workers to fix leaks and do other work rather than hiring contractors. He applauded the workers and the union for their help in achieving this goal.

Lake Asphalt to market UWI products

BUILDING upon its strategic goal of creating an industrial powerhouse in an entrepreneurial university with a diversified revenue base, UWI, St Augustine signed a licence agreement with Lake Asphalt of Trinidad and Tobago to commercialise two asphalt-based products developed by The UWI – “UWI Plastic Cement” and “UWI Primer.”

“For several years, Lake Asphalt has walked this road with us and has now taken the bold step of partnering with us in commercialising technology developed on this Campus,” said Principal Professor Brian Copeland as he commended Lake Asphalt on their strengthened partnership with The UWI.

The licence agreement follows a memorandum of understanding (MOU) signed between The UWI and Lake Asphalt in 2015 to collaborate on research, development and commercialisation of asphalt and asphalt-based products.

Addressing University and Lake Asphalt senior executives, Professor Copeland said the agreement is a reflection of The UWI’s focus on creating and embedding a culture of innovation and entrepreneurship. Licensing is one mechanism through which the Campus can assist organisations to increase their competitiveness. Under the terms of the agreement, The UWI grants Lake Asphalt an exclusive, royalty-bearing licence of the two UWI-developed products for manufacture, distribution and sale within the class of primers and sealants.

For Lake Asphalt, the signing represents an important milestone in realising its vision of maximising the value of Trinidad and Tobago’s asphalt for company, community and country. The CEO said that while the agreement is really just the first step in bringing these products to market, the company is motivated by the joint successes the venture represents for both parties.

“There is work to be done in understanding the technical aspects, such as the proof of process (and) the marketing strategy to name a few. Rest assured we remain committed to partner with UWI in this strategic alliance…. Our success is their success and vice versa”

$500 MILLION FROM EU TAXPAYERS

Lining its pockets with foreign aid for HIV/AIDS and universities, government accessed TT$500 million from EU Partnership programmes. The funding is part of the European Union Partnership Agreement Meeting for the African, Caribbean and Pacific Group of States (ACP), known as the ACP-EU Partnership Agreement or the Cotonou Agreement. The funding period is coming to a close and TT is engaging with the ACP Group and the EU. Discussion for a new Cotonou agreement continue as the old agreement will expire in 2020.

The Cotonou Agreement signed on June 23, 2000 was established for a 20-year period from 2000 to 2020 and is the most comprehensive partnership agreement between developing countries and the EU. It establishes the framework for EU’s relations with 79 countries from the ACP.

The Ministry of Planning and Development is the focal point for EU partnership agreements. The country directly benefited through the 9th, 10th and 11th European Union Fund (EDF) programmes with over half a billion TT$ in grant funding resources from the EU from 2000 to date.

At the ACP-EU Partnership Agreement Meeting in Suriname from May 28-30 the ministry delegation had an opportunity to discuss issues relating to development finance under the 11th EDF and to reflect on projections for the post 2020 period with national and regional authorising officers; development partners, such as the European Commission, the European Investment Bank, the private sector, civil society and parliamentarians.

Projects include the development of tertiary education which received 27 million euros (TT$206 million) while TT$300 million went to health for HIV/Aids which currently affects 11,000 victims, amid 40,000 jobless, 300, 000 homeless and 40,000 refugees.

YOUTH EMPLOYMENT

Economist Indera Sagewan-Ali told a career fair at St Augustine Girls’ High School that a stagnant economy had no opportunities for youths. Therefore… they need to specialise in the field and consider in which country they wish to practice. Thousands of university graduates are unemployed or work in jobs for which they were overqualified. Fields, including doctors, lawyers and engineers, were saturated and other markets have few jobs.

Maverick leaders, politicians and policymakers – past and present – were not working in the best interest of youths. “Now is when we have to be preparing for that future, for the jobs that all of you are going to fill. So .. where will be the jobs in TT? Where will be the jobs for you in manufacturing? ….. in the environment? There won’t be any… It speaks to the mis-match between our education system and the needs of the job market… an absolute absence of the curriculum planning in our education system and the total absence of planning to develop industry.”
The situation will not change in the next few years because economic development did not occur overnight but took at least a decade. “My advice to parents and to children is to look at the global space and position yourself to be marketable in that global space… You need to start to use this (brain) to see where the world is going.” That advice extended to entrepreneurship as the market of 1.3 million people was too small. However, whatever they did, they should be committed to excellence, flexible and open to change because change was the only constant in this world.

SAGHS Parent Teacher Association president hoped the fair would not only provide valuable information but inspire women to clean up the “mess” that the country and the world has become. Youths were discouraged by negativity including climate change, crime and violence, corruption, food scarcity, water shortages, refugees and displaced people. Positive things were happening. Countries invested in clean energy thereby cutting greenhouse gas emissions by 80 per cent curtailing gloomy scenarios. Vaccines and cures relieve diseases and progress in treating cancer includes the use of nanoparticles.

“… I can sense anxiety ..you are perhaps a bit scared .. wondering about your future. But I also see the blessing of hope, of a future that beckons to great things… believe in yourselves, in your dreams. In each one of you glitters a brilliant opportunity to change TT, the world – a mission we all share.”

The Culture Minister said changes in political administrations hinder progress because the ruling administration reversed decisions of the previous one. That would be addressed in the future by students. “We are going to come to a space where.. we made a decision to go forward regardless of who is driving the car. And when we get there it will be a time of rapid change.. and I look forward to it.” Leaders, policymakers and influencers as public figures need self-control to dissect situations, understand the bigger picture and predict the impact of what they said or did .

Windfalls from BP and Shell should be invested in new indusries to create work with divestment of state assets in energy and utilities, the best way to achieve progress. An impressive industrial skill set developed over a century of exploration, production, refining, marketing and shipping of oil, gas and petroleum products. Solarisation of Agriculture, the weakest link with paltry funds, will diversify the economy and prepare for energy transition.

Iconic Angostura at 195

With a Royal Warrant issued by Her Majesty Queen Elizabeth II of the UK who toured the factory in the 1950s, Angostura Distillery can produce up to 168,000 bottles of alcohol per day, with the potential to produce twice that (up to 300,000). The company manufactures 60,000 bottles of bitters a day. It has 60,000 casks of aged rum in its warehouse ranging from one to 23 years old.

Bharath sees it able to achieve more ,waiting to burst onto a worldwide stage, with opportunities abroad. The focus must be trained on foreign expansion. “I have been approached by companies who want to do business with us and I am ready. I am ready to make us more known out there. I am ready to push this company further afield beyond our shores,” he said.

Renewable energy is the obvious way to go.

At 190 years old, Angostura hosted a charity auction to raise funds for disabled children with a special edition rum Legendary which sold for $249,000. This year, two prizes were a one-of-a-kind Bunnahabhain 39-year-old single malt whisky, donated an international partner, Artisan Spirits.

Angostura commissioned Asprey of London, jewellers to the Prince of Wales, to create an exquisite crystal decanter for Infinity rum, a specialty blend created by a female team, sweet and spicy with hints of papaya, guava and butterscotch which Noreen Ramdhan won at $110,000.