Petrotrin haunted by mistakes of 1993

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With approximately 2500 (or 3500…as reports vary) workers facing jobs losses at the nation’s only oil producer, Petrotrin, we must ask whether it was the Malcolm Jones Executive administration that hit the harder blow, or whether too many mistakes were made at the time when the company was formed in 1993.

By 1985, the then PNM Government, through Trintoc (1974) bought out Texaco’s assets except Trinmar. By 1993, a new Patrick Manning-led PNM Government merged Trintoc and Trintopec into Petrotrin. It was by the year 2000 that Trinmar was merged into Petrotrin.

In addition, presumably to protect and promote the company’s profitability, in 2004 under another Patrick Manning-led PNM Government, Petrotrin was granted an automatic stake in all exploration and production arrangements with foreign companies in Trinidad and Tobago.

At no point was there any public discussion or strategic plan to rationalize the company’s operations to defend not only short and medium term success, but also long-term sustainability and profitability.

It seems the primary goal with Petrotrin has always been tucking tail and running from the strength of the OWTU, which grew substantially between 1993 and 2004.

Today, Petrotrin operates Trinidad and Tobago’s only oil refinery. Some crude is imported to meet the needs of the refinery. Petrotrin’s refinery produces liquid petroleum gases, unleaded motor gasoline, aviation jet/kerosene, diesel/ heating oil, fuel oil and aviation gasoline among other products.

According to a report in the Trinidad Guardian of 28 August 2018, Petrotrin was incorporated in 1993 to consolidate the interests of the Trinidad and Tobago Oil Company Limited (Trintoc) and the Trinidad and Tobago Petroleum Company Limited (Trintopec).

“These companies were, in fact, an amalgamation of predecessor companies including Trinidad Leaseholds Limited, BP, Shell, Texaco and others. In the case of both Trintoc and Trintopec and later Trinmar assets, the Government of Trinidad and Tobago spent hundreds of millions of dollars of taxpayers’ money to protect jobs and to control “the commanding heights of the economy.”

The core mandate of protecting jobs has remained with the company, regardless of which political party has been in power. By bringing all three assets together then, the Government unwittingly helped consolidate the Oilfield Workers’ Trade Union’s power in the State-owned energy sector and made it even more difficult to institute changes.”

The report continued:

“The amalgamation of the companies was donewithout a full understanding of how the two cultures were to be integrated, basic issues like the classification of workers and salaries were not properly thought through, with some positions requiring individuals to operate in the same job with different titles. This never helped and the crucial issues of esprit de corps and organizational commitment would have been difficult to achieve.

Petrotrin as a company has three key areas, Exploration and Production (both on-land and offshore in its Trinmar assets), Refining and the Marketing and its Administrative areas that will include things like its hospital.

To appreciate the company’s challenge, it must be looked at from these perspectives.”

In the 1993 Administrative Report of the Ministry of Energy and Energy Industry, it was stated: “In reviewing the events in the petroleum industry for 1993, the main achievements are to be noted in Government’s effort to rationalize the local petroleum industry, the expansion of foreign investment in the energy sector and the ongoing developments of the natural gas industry.

It should also be mentioned that during this year, commercial oil and natural gas production declined from their 1992 levels by 9% and 15%, respectively.

By an Act of Parliament in June 1993, the core assets, liabilities and obligations of the Trinidad and Tobago Oil Company (Trintoc) and the Trinidad and Tobago Petroleum Company (Trintopec) were vested in a single company, Petrotrin – the Petroleum Company of Trinidad and Tobago. It was incorporated in January 1993. This represented a significant milestone for the country as the integrated company sought to effect economies of efficiency in its activities in order to increase its profitability.”

The then Board split the company into exploration and production and refining and marketing and even then the announcement to shut down the refinery came as a surprise.

At the company’s website, Petrotrin boasts:

·         We employ more than 5,000 people directly and several thousands more indirectly;

·         We pay over 6,000 pensioners;

·         We provide medical services and facilities for about 20,000 employees, retirees and dependents;

·         We provide an annual subsidy of TT$200 million to keep the local price of cooking gas low;

·         We provide our local market (Trinidad and Tobago) with LPG, gasoline, diesel, aviation fuel and bunker fuel;

·         We support, sponsor and partner with organizations in many areas including sport, culture, education, environment and community empowerment.

With all of these commitments, it is not impossible that spending control measures could have been undertaken to ensure no major loss of essential services to current and former employees.

Moreover, talk of rationalization in a time of profitability before the current debacle was never considered alongside the idea of matching staff and operating costs with the company’s long-term vision and sustainability programme.

In a time of profitability, it would have been a much less agonizing process of offering voluntary programmes to allow staff to be able to comfortably subsist while looking for new jobs, unlike the present where increasing unemployment has become a regular fixture in the lives of hardworking women and men.

What is clear is that in an effort to please the OWTU and avoid political fallout, the very workers that the Rowley PNM Government is now pretending to cry about were the ones placed on the sacrificial altar of political expediency over and over again.

Whereas workers could have been given a fair and easy way to find new jobs and protect their livelihoods and families, up to 3500 families now face devastation because of a 25 year old political football that has now come back to haunt yet another PNM Government.

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