TRINIDAD 3

Trinity Submits TGAL Field Development Plan

Trinity Exploration & Production submitted the Field Development Plan (FDP) for the TGAL Area, located on the Galeota Block, offshore the East Coast of Trinidad to the Ministry of Energy and Energy Industries (MEEI).

This FDP is the first phase of a potential wider step-out development moving across the Galeota anticline to fully develop the reserves potential from the large volumes of oil in place (circa 700 mmbbls).

The first phase currently contemplates the installation of a low cost 10 well conductor supported platform, the installation of a thermoplastic composite subsea export pipeline, the laying of a subsea power cable to provide offshore power and the drilling of horizontal production wells.

The Petroleum Company of Trinidad and Tobago Limited (Petrotrin) has a working interest of 35% and Trinity 65% in the proposed development.

Bruce Dingwall CBE, executive chairman of Trinity, said:

“The submission of the first phase FDP is a major milestone on the journey towards first oil from the TGAL area. Against the backdrop of falling black oil production in Trinidad, Trinity believes that this development would be a key enabler with respect to; direct and indirect local employment, to the generation of revenue and in the ultimate aim of maximizing reserves recovery for all stakeholders. Trinity is adopting best practice in the use of new technologies above and below the mud line which have enhanced the attractiveness of this development.

“Much work still has to be done with the supply chain, Petrotrin, the MEEI and the Ministry of Finance to ensure that this project generates an appropriate rate of return for all stakeholders and to enable this important project to get to FID in the envisaged timeframe.”

Final Investment Decision (FID) is being targeted for H1 2020, at which time the optimal mechanism for financing the development will have been determined and agreed between all stakeholders.

Heritage CEO gets Golden Hello for strategic leadership

Heritage Petroleum Company Ltd hired a new chief executive officer, Mike Wiley, an energy executive who worked at ExxonMobil as an engineer. He will lead the new entity that will take over Petrotrin’s exploration and production assets on a salary of US $450,000 annually, about TT $240,000 monthly.

Amid alleged secrecy surrounding its organisation, communication to the public about its incorporation and appointment of directors and executives, Heritage said it will make announcements on staffing at the appropriate time.

Heritage is chaired by Petrotrin’s chairman Wilfred Espinet and his deputy, Reynold Ajodhasingh. While the public had been told two new companies would be established to replace Petrotrin after the government announced the Pointe-a-Pierre refinery would begin shutting down operations, the actual name of the company was first made known via newspaper ads.

Heritage is one of five new state entities created by Petrotrin’s restructuring. Guaracara Refining Company will hold assets of the Pointe-a-Pierre refinery; Paria Fuel Trading Company will continue trading and marketing.

Petrotrin as an entity will remain as a company to deal with legacy matters which will be placed into Trinidad Petroleum Holdings Ltd. Assets from Petrotrin will be transferred to the new companies before they can be fully operationalised, by the end of the year.

Petrotrin, in its restructuring, indicated there will be an exploration and production company and a company dealing with fuel trading and other business.

So far, Petrotrin has used international recruitment processes to hire one person of the highest calibre because it’s the intention to use international benchmarking to be engaged in oil production. Petrotrin hired Mike Wylie in August 2018 to head the exploration and production of the new Heritage company. Wiley is now actively engaged as part of the recruitment process. No one has been hired for Paria Fuel Trading Company at this time but the process has begun.

Wylie’s remuneration package, given the nature of the assignment, international benchmarking and the running of an oil company of this size, is US $425,000 per year plus housing, transportation and healthcare.

Point-a-Pierre MP David Lee asked when the Heritage Petroleum Company was formed in reference to when Wiley was hired. Rowley did not have the date in hand but Petrotrin has been in existence for decades and in anticipation of populating its sub-units under the holding company it would have been proactive in finding such persons. “So the relevance of when the Heritage Company was formed or registered was not a great issue.”

Imbert: Govt guaranteed $2.6b in Petrotrin loans in six months

PUTTING HEADS TOGETHER: Prime Minister chats with Attorney General Faris Al-Rawi and  Finance Minister Colm Imbert in the House of Representatives.  Piloting the Miscellaneous Provisions (Heritage Petroleum, Paria Fuel Trading and Guaracara Refining Vesting) bill in the House of Representatives, Finance Minister Colm Imbert says in six months Government guaranteed more than $2.5 billion in loans for Petrotrin.

The bill is aimed at divesting some assets of Petrotrin in three companies: Heritage Petroleum in Santa Flora and Point Fortin which will manage exploration and production; Paria Fuel Trading in Pointe-a-Pierre for fuel trading and product supply activities, as well as logistics, terminalling and product handling; and Guaracara Refining which will preserve the refinery assets and provide utility services to Petrotrin and Paria.

Petrotrin remains as a company in existence, will continue to operate and will be a member of the subsidiaries under new holding company Trinidad Petroleum Holding.

This will allow Petrotrin to meet all of its outstanding contractual liabilities unhindered and will elude the possibility of Petrotrin bond holders imposing a requirement that they approve the new structure of the company.

Survival of Petrotrin has been based on the non-payment of taxes and royalties to the Government and by procuring Government guarantees. Total guarantees for this year alone was US $402 million, over TT $2.6 billion. He wrote letters of guarantee on behalf of Petrotrin including: Republic Bank in March for US $50 million; First Caribbean in July for the same figure; for Scotia Bank in August for US $50 million, and also in November 9, (six) days ago; for US $55 million for First Citizens Bank on September 27; and US $25 million for FCB on October 26.

“Every time we do this it increases the public debt.”

Petrotrin was owing close to $4 billion to Government in supplementary petroleum tax, other petroleum tax and royalties.

For refinancing of the US $850 million bond due in August 2019 Petrotrin approached the financial markets in October 2018 to refinance its long-term bonds. Four respondents were short listed and two consortiums agreed to collaborate and execute the financing of a combination of the Petrotrin exit costs as well as the 2019 bond and 2022 bond (of US $750 million). The consortium comprises Credit Suisse, Bladex and FCB and the teams of Morgan Stanley and Ansa Merchant Bank.

The consortia were working towards having the first tranche of the exit costs settled by November 30 and bonds refinanced soon afterwards “well in advance of the August 2019 terminal date.”

Petrotrin exit packages- Average worker to get $.5 million

Over half a mil­lion dol­lars is the av­er­age pay­out each Petrotrin work­er will go home with, says Fi­nance Min­is­ter Colm Im­bert. Some work­ers are each get­ting over $2 mil­lion in pay­ments .   Im­bert gave the fig­ures dur­ing de­bate on leg­is­la­tion to vest as­sets of Petrotrin in the three new com­pa­nies—Her­itage Pe­tro­le­um, Paria Fu­el Trad­ing and Guaracara Re­fin­ing—which will form the re­struc­tured en­ti­ty from De­cem­ber 1.

The leg­is­la­tion was passed at 11.59 pm with the Op­po­si­tion Unit­ed Na­tion­al Con­gress ob­ject­ing, from de­bate con­tri­bu­tions to com­mit­tee stage and fi­nal vote. It was passed with 21 Gov­ern­ment votes, with 12 UNC MPs present vot­ing against it.

Con­clud­ing de­bate, Im­bert ad­dressed var­i­ous UNC claims and con­cerns, par­tic­u­lar­ly two points by Op­po­si­tion Leader Kam­la Per­sad-Bisses­sar which he said were “in­ter­est­ing” but which he firm­ly re­butted. On claims that clo­sure of the re­fin­ery would “pau­perise” work­ers in the re­trench­ment/sev­er­ance process, Im­bert said “The av­er­age pay­out is in ex­cess $500,000 per em­ploy­ee! And there are a num­ber of peo­ple who are get­ting in ex­cess of $2 mil­lion in pay­ments. It seems UNC MPs don’t un­der­stand the con­cept of ‘av­er­age’. The av­er­age pay­out is in ex­cess of $500,000, there­fore that can­not be a ‘few’ (work­ers). That’s at least half. That’s the con­cept of av­er­age.”

On Per­sad-Bisses­sar’s claims, Im­bert not­ed she’d said the Peo­ple’s Part­ner­ship fi­nance min­is­ter had signed an or­der vest­ing Pa­lo Seco Agri­cul­tur­al Lands Ltd (PSAEL) with Petrotrin and she’d con­tend­ed Gov­ern­ment’s pro­posed leg­is­la­tion was flawed. She al­so claimed the hir­ing of Her­itage CEO Mike Wi­ley was il­le­gal, breach­ing Pe­tro­le­um Act reg­u­la­tions (sec­tion 42). That act called for the li­censee to min­imise em­ploy­ment of for­eign per­son­nel, en­sur­ing such em­ploy­ees are en­gaged on­ly in po­si­tions for which the op­er­a­tor can­not, af­ter rea­son­able ad­ver­tise­ment in at least one dai­ly news­pa­per, find avail­able na­tion­als with the nec­es­sary qual­i­fi­ca­tions and ex­pe­ri­ence.

Im­bert said Gov­ern­ment firm­ly felt the 1993 Petrotrin leg­is­la­tion on vest­ing was bad­ly draft­ed and the PP fi­nance min­is­ter lacked the pow­er to vest PSAEL lands in Petrotrin and on­ly had the pow­er to vest PSAEL shares in Petrotrin. Im­bert said be­cause of am­bi­gu­i­ty in the law, Gov­ern­ment—in the cur­rent bill—cov­ered all bases on lands be­long­ing to PSAEL and Petrotrin and all were vest­ed. Due to the pos­si­bil­i­ty of the PP’s vest­ing ac­tion be­ing null and void, he said Gov­ern­ment plugged all loop­holes, specif­i­cal­ly hav­ing the leg­is­la­tion vest PSAEL shares so no “smart lawyer” could at­tempt ac­tion.

Wi­ley’s ap­point­ment to Her­itage was prop­er since the Pe­tro­le­um reg­u­la­tions Per­sad-Bisses­sar cit­ed per­tained to “li­censee” and the Her­itage com­pa­ny wasn’t a li­censee, lack­ing a li­cense to op­er­ate/ex­plore/pro­duce pe­tro­le­um. For Her­itage to be­come a li­censee, the En­er­gy Min­is­ter must con­sent to as­sign Her­itage a pe­tro­le­um li­cense. “That hasn’t yet oc­curred,” Im­bert added.

On the han­dling of Petrotrin’s li­a­bil­i­ties ahead, Im­bert said the hold­ing com­pa­ny be­ing formed – Trinidad Pe­tro­le­um Co Ltd – which will own the three new com­pa­nies and Petrotrin it­self, will own all as­sets and li­a­bil­i­ties of the cur­rent Petrotrin.

“The hold­ing com­pa­ny will de­cide how it will treat with the li­a­bil­i­ties in terms of the rev­enue streams com­ing to the Her­itage or Paria com­pa­nies. All of the li­a­bil­i­ties re­main the li­a­bil­i­ties of the hold­ing com­pa­ny and sub­sidiary com­pa­nies. On­ly short-term debts of Petrotrin – $400 mil­lion – will re­main with Petrotrin and the oth­er li­a­bil­i­ties will be trans­ferred to Her­itage Pe­tro­le­um. But the hold­ing com­pa­ny will own all the as­sets and li­a­bil­i­ties of the cur­rent Petrotrin.”

Ex­perts and an­a­lysts hired by Petrotrin to ad­vise the com­pa­ny es­ti­mat­ed the new com­pa­nies will earn US$316 mil­lion a year in net for­eign ex­change. This in­cludes US$1 bil­lion from crude oil sales, US$809m from sale of re­fined prod­ucts re­gion­al­ly and US$128m from sales of re­fined prod­ucts through bunker­ing. T&T’s sour crude oil’s cur­rent price is US$65 per bar­rel.

Double blow for Independent senator

For­mer In­de­pen­dent Sen­a­tor Melis­sa Ramkissoon embarks on a new journey ahead, leav­ing evolving Petrotrin and re­lin­quish­ing her po­si­tion as a sen­a­tor as the com­po­si­tion of the In­de­pen­dent bench changes .

“It’s a new sea­son for me—but I re­main pos­i­tive,” Ramkissoon said,  af­ter sub­mit­ting her res­ig­na­tion from the In­de­pen­dent bench to Pres­i­dent’s House. She said she was ho­n­oured and grate­ful to have served. A Petrotrin en­gi­neer at Trin­mar, she is ready to move when her sec­tion clos­es by No­vem­ber 30. Lament­ing the re­fin­ery clo­sure in the 2019 Bud­get de­bate, she spark­ed crit­i­cism from Agri­cul­ture Min­is­ter Clarence Ramb­harat.

She said, “I was ap­point­ed an In­de­pen­dent sen­a­tor, proud­ly rep­re­sent­ing the so­cial sec­tor of the oil­field work­ers and en­gi­neers. The ex­pe­ri­ence in the Sen­ate kin­dled the fire to fight for jus­tice and so­cio-eco­nom­i­cal hu­man rights. As an ap­point­ed mem­ber of Par­lia­ment, the po­si­tion was al­ways clear­ly known to be part-time and tem­po­rary. There­fore, the Pres­i­dent wish­es are re­spect­ed and ful­ly sup­port­ed. I strong­ly be­lieve all per­sons elect­ed or ap­point­ed to serve en­joy the con­scious vote in our democ­ra­cy and hold the best in­ter­est of the peo­ple of T&T. The world is evolv­ing and our peo­ple need stand to­geth­er to fight to save our core val­ues and rise above the fears we face.”

“I thank the pub­lic, my fam­i­ly, my dear friends for their sup­port and prayers through my jour­ney in pub­lic life and spe­cial ac­knowl­edg­ment to my Petrotrin co-work­ers, fam­i­ly away from home. I have faith in the peo­ple of T&T,” she said.

She par­tic­i­pat­ed in de­bate on 28 bills, laid 16 mo­tions and brought a mo­tion—to re­solve Cy­ber­crimes which was sup­port­ed by Gov­ern­ment. The youngest In­de­pen­dent sen­a­tor to be ap­point­ed—at age 28 in 2015—she was among sen­a­tors who o re­signed af­ter the Pres­i­dent changed the In­de­pen­dent bench’s com­po­si­tion. She may be an excellent energy minister in a new government in 2020.

Of the nine In­de­pen­dents, sen­a­tors Sophia Chote, Paul Richards and re­cent­ly ap­point­ed Dr Var­ma Deyals­ingh were re­tained. New faces on the In­de­pen­dent bench are for­mer In­de­pen­dent sen­a­tor An­tho­ny Viera, re­tired Com­mu­ni­ca­tion Work­ers’ Union leader Joseph Re­my, at­tor­ney Hazel Thomp­son-Ahye, engineer De­oroop Teemul of Na­tion­al Coun­cil of In­di­an Cul­ture, econ­o­mist Am­ri­ta De­onar­ine and con­sul­tant Char­rise Seep­er­sad.

The heavy irony of decisions to demolish instead of privatise the SOC with a public offering, by the scientocracy, including two geocrats, weighs on geologists and engineers, bulwark of the state for over a century, doomed as the paradoxical spectre of graduate unemployment looms. As banks consolidate, regimes again ditch a golden opportunity for a regional energy company traded on a regional stock exchange to boost prosperity in a regional market.