Petrotrin workers called for a strike by the Oilfields Workers’ Trade Union (OWTU) after management refused wage increases. The action could shutter the country's refinery.
Energy Minister Kevin Ramnarine addressed the Trinidad and Tobago Parliament today on the financial status of Petrotrin, the state oil company. He mentioned Petrotrin's low refining margins, the effect of the drop in worldwide oil prices, and the company's TT$346million (US$54.4million) loss in fiscal year 2014.
Cost-cutting
Petrotrin must tightly control costs, he said, and has already cut TT$340 million out of its operating budget for fiscal 2014-2015 compared to fiscal 2013-2014. Petrotrin's labor costs are above average for a national oil company (NOC). Petrotrin's salaries and wages costs are 54.5% of its budget, compared with 34-40% for other NOCs.
Petrotrin has a major debt burden from international bonds issued in 2007 and 2009, to support refinery projects. As of 1 December 2014, Ramnarine said the company’s total debt (unaudited) is TT$14.38 billion, including TT$6 billion in short-term debt and TT$8.38 billion in long-term debt.
Expectations
Ramnarine said, "All the analysis shows that the way forward for the company is to increase crude oil and gas production and that can come from Petrotrin’s own efforts as well as from ventures such as its Lease Operatorship, Farmout, Incremental Production Service Contract (IPSC) and Joint Venture programs.
He expects production to increase from the company’s Trinmar operations, specifically from the Jubilee field and the ongoing South West Soldado project. He said Petrotrin was planning to retain additional drilling capacity, both land and offshore, beginning in January, "to improve its production and reserves position."
In the past year, Petrotrin has spent TT$800million on new land and marine seismic data. By the end of May 2014, the company had acquired 540sq km of 3D seismic data in its Trinmar and North Marine acreages to fulfill new license obligations. Petrotrin also acquired the largest 3D seismic data set over its licensed land acreage, 312sq km, and is actively pursuing exploration and development drilling leads, Ramnarine said.
Petrotrin plans to invest TT$3.5billion in the South West Soldado (SWS) project over the next 5 years, including TT$2.3billion currently, to achieve an incremental production increase of 6000 bo/d by yearend 2015. The shallow-water field off the southwest coast of Trinidad has been dormant for 25 years, and the reactivation is scheduled in three phases.
Petrotrin has 4300 permanent employees, 1200 temporary workers, and about 5400 pensioners/beneficiaries.
The Minister said "This is not a time to breakdown Petrotrin but to build up Petrotrin. This is a time for the employees of Petrotrin to recommit to the stabilization and growth of the company."
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