(1) BHP Broadside well was a duster.
(2) Govt rejects Patriotic’s counter-proposal to buy refinery
Oct 31 2020
Energy and Energy Affairs Minister Franklin Khan announced the Government rejected the counter-proposal by Patriotic Energies and Technologies Company Limited to acquire the Petrotrin refinery was now considering its options which include considering the second bidder Klesch and third bidder Beowulf Energy or another proposal from Patriotic.
“Patriotic is cognisant of what the key outstanding issues are and made a final proposal ahead of the deadline on the 29th of October. I regret to say that this final proposal does not address the outstanding issues that could lead to a signed contractual agreement and that is the state of play…..this was and has been a very complex negotiation because we were attempting to sell a complex asset involving the sale of the multi-billion dollar state asset. As such, due diligence by the State was paramount in this exercise.”
Both parties are bound to non-disclosure agreements in these discussions. The key issues at the end of prolonged discussions were the purchase price financing, the restart financing and first priority lien on the assets.
“After …exchange of letters and a series of meetings involved with the negotiating team, the Honourable Prime Minister and the Honourable Minister of Finance gave the parties an October 31 deadline to reach an agreement on the sale of the captioned asset. The Government is committed to restarting the refinery with private capital injectors, mindful that if we restart if will have a positive, significant impact on the economy, on GDP, employment etc and we will move expeditiously to do so. The Government will be in a position to consider its options … and the public will be informed … once we have greater clarity on this matter.”
The State would now have to search for an alternative entity to take over the refinery because the fence line communities have experienced a considerable degree of decline in their economic activity.
The Government would have to be aggressive in that process as it has been two years since the refinery was mothballed. “It would also now have to consider the possibility that the mothballed refinery may not be opened and think about ways in which to encourage economic activity in and around the Petrotrin area.”
He encouraged policymakers to let Heritage invest from its profits towards the financing of a micro-financing institution parallel to what BP formed in Mayaro or Atlantic formed in Cedros to stimulate economic activity in the fenceline communities.
An Eteck park in Reform and Claxton Bay can boost and provide substitute levels of economic activity to workers and businesses. “Heritage may at this point need to think about their CSR strategy because it would probably now have to be deeper and more impactful in terms of keeping the fenceline communities afloat whist a Plan B is now put in place.”
In September 2019 the Government announced that Patriotic Energies won the bid to purchase the refinery, over 77 competitors. The first rounds of negotiations began in February and In July the Government was ready to sign the deal with Patriotic. However, in the months that followed the union and the ministerial team were at loggerheads. On September 28 the Prime Minister gave the parties until October 31 to come to an agreement.
Patriotic director Ozzi Warwick said, “Patriotic earnestly hopes that this proposal will lead to the swift completion of the acquisition process, paving the way to the reopening of the refinery in the interest of the People of Trinidad and Tobago.” Patriotic promised to create 6,500 jobs after acquiring the refinery and port.