Trinidad and Tobago is replacing distressed state-owned Petrotrin with three new entities as it moves to shut the 160,000 b/d Pointe-a-Pierre refinery by the end of October.
The government is renegotiating the terms of Petrotrin's $1.6bn in debts with foreign banks, and projects that earnings from crude exports will allow it to write down Petrotrin's local liabilities, including redundancy payments to the refinery's 1,700 direct employees.
The first of the new state-owned companies, Heritage Petroleum, will take over Petrotrin's exploration and production operations, while another new entity, Paria Fuel Trading, will handle crude exports, products imports, terminal operations and bunkering. The assets of the refinery will be transferred to the third new company, Guaracara Refining.
Heritage Petroleum and Paria Fuel Trading were locally incorporated on 5 October, while Guaracara Refining is yet to be incorporated.
"The refinery's operations were an albatross around our neck, but Petrotrin's assets can still be used in a productive way for the benefit of the country," energy minister Franklin Khan said. The government hopes to have the new companies in operation by December.
The refinery has lost about $1.25bn over the last five years, according to the government. Petrotrin owes the government $462mn in taxes and royalties, and would have needed a cash injection of $3.9bn to stay afloat.
In August the government issued a request for proposals from 13 trading companies to supply 25,000 b/d of refined products to meet domestic demand. The first shipment of imported fuel will arrive this week, the energy ministry tells Argus, adding it could not yet state the types, source or supplier.
The imports will ensure there is no local market disruption, and will supplement the 20 days of inventory from the refinery after it is closed, the ministry said.
The first export of crude that would normally be processed by the refinery will be at the end October, the government said.
The country's crude production in January-August was 66,400 b/d, 12.7pc less than a year earlier, and half of 2006 output, according to energy ministry data. Petrotrin accounts for about 40,000 b/d.
"At this level of production, and at today's prices, the new companies responsible for upstream and marketing could earn about $850mn/yr," the energy ministry official said. "This would be significant in dealing with the debts the refinery's operations have left us."
