After half of Petrotrin’s debts paid-off PM: Heritage Petroleum is a success story

The content originally appeared on: Trinidad and Tobago Newsday

The Prime Minister speaks during a tour of
the workstation at the launch of the Industrial
Apprenticeship Mechanical Programme (I-MAP) at
the Heritage Industrial compound, Santa Flora on
Monday. PHOTO BY AYANNA KINSALE

THE Prime Minister says Heritage Petroleum Company Ltd is more than halfway to repaying its predecessor’s $11.8 billion debt after less than six years of operation.

Dr. Rowley said he is now standing proudly behind his decision to restructure Petrotrin.

Speaking during the launch of an apprenticeship programme with the Ministry of Youth Development and National Service (MYDNS), Heritage chairman Michael Quamina SC said the company had already serviced $7.5 billion of its predecessor’s debt.

“(This) works out to an average annual payment of $1.4 billion a year on the Petrotrin debts, which we are servicing without assistance from the shareholder,” he said.

In addition to decreasing its debt, Quamina said the company has been making its tax requirements, paying around $12.6 billion annually since its inception in 2018.

These payments, he said, were being made all while meeting core expenses for exploration and production of oil and gas. Those costs, he said, are expected to total $2.9 billion this year.

Minister of Energy and Energy Industries Stuart Young said this positive financial revelation would not have been possible without the government’s decision to restructure the state-owned oil company in 2018.

For the Prime Minister, it was nothing short of what he called a “success story. “On top of servicing the loan and taking responsibility and the threat away from the Minister of Finance, Heritage has done so well that it is able to carry out its legal responsibilities, which is to pay its taxes and royalties to the Minister of Finance. Something that Petrotrin was not doing,” he said.

“Heritage has been paying its liabilities to the BIR (Board of Inland Revenue), so we’ve been getting some taxes from Heritage. Heritage is a success story.”

The move to restructure Petrotrin has been one of Rowley’s most contentious policies during his term in office, particularly for former workers, the Opposition UNC, and trade unions. But, Rowley said, while these groups may have been happier if the government held its hand, citizens would not have.

“$850 million US dollars due in August 2018 in one check, which Petrotrin could not pay. Struggling to service an additional $750 million US… That was the national oil company. If we had left it the way it was, approximately 5,000 people would have been happy, a union would have been all over the country making noise and threatening everybody, living high on the hog. But 1.4 million people would have been on the road to the IMF (International Monetary Fund). The government had to act.”

At the time, he said going to the IMF would have resulted in a significant devaluation of the country’s currency down to between TT$10 or $12 to US $1.

“If you want to think you could talk now about property tax is a pressure and this is a pressure and that is a pressure, I want you for just one moment, contemplate the exchange rate at $10 or $12 to US$1. That is what this government was facing. That is what this government saved the country from.”

As part of the restructure, Trinidad Petroleum Holdings Ltd was created. It has four subsidiaries: Heritage, Paria Fuel Trading Company Ltd, Guaracara Refinery Ltd, and Petroleum Company of Trinidad and Tobago (Petrotrin).

Rowley said two parties are currently interested in the Guaracara refinery, but it was not yet a sealed deal. “One looks very promising, one looks very interested. But until the horse begins to drink the water, you don’t know what’s happened at the river.”

The officials were speaking at the launch of the 15-month Industrial Apprenticeship Mechanical Programme (I-MAP) for youth between 15-35 years.

They will be exposed to courses in industrial maintenance technology, electrical technology, mechanical engineering technology, and welding technology. As part of the programme, trainees will also be given a nine-month apprenticeship.

Rowley said the financial success of the company has allowed for programmes like this and others to occur. He said creditors placed liens on the company’s assets due to the debt. But, Rowley said, as the money was repaid the company regained control of its assets, giving some breathing room to help fenceline communities.