When authorities in Trinidad closed the island’s major money-losing oil refinery last year, nearly 3,000 workers were sent on the breadline, nearby businesses suffered and neighboring Caribbean nation clients of the facility were left to fend for themselves.
The government had complained that the Petrotrin Refinery in south Trinidad was losing more than $100 million annually, its staff tally was bloated and new equipment upgrades were needed to keep up with present day demands.
In the past week, however, the administration of Prime Minister Keith Rowley—which faces general elections in a year’s time—reached agreement with the major labor union that had represented Petrotrin workers to take over and restart the refinery. The facility had for decades been regarded as an economic lifeblood of south Trinidad so there was a feeling of doom and gloom once the last barrel of oil was refined.
The influential Oilfield Workers Trade Union has now, however, put together a consortium that would come up with $700 million in financing to buy the refinery and get it up and running again.
Once authorities closed the gates to the refinery, the union had been adamant that a workers group should be allowed to pick up the pieces, get it up and running again and reemploy the large group of people who depended on employment and related activities.
But now that this is a reality, opposition parties and social activists are questioning whether government had granted a sweetheart deal to a group with general elections in mind.
Former prime minister and opposition leader Kamla Persad-Bissessar said she is more than surprised that a union-led group was able to form a company big and capable enough in just a matter of months to be able to raise the financing and acquire the refinery. Experts say it will take at least $300 million more to restart the engines, obtain re-certification for key components like high pressure pipelines and to reemploy technicians, many of whom have scattered around the country and even abroad. “The refinery was plagued by high and increasing debt, low productivity levels, escalating manpower costs and an expenditure pattern of habitually surpassing its income and earnings. The refinery lost billions each year,” Finance Minister Colm Imbert told parliament as he announced the sale to the union.
Imbert said that of the many firms which had put in bids, Petrotrin was the only one willing to offer upfront cash payment. The Cabinet has also agreed that the company is granted a three-year moratorium on all payments of principle on interest toward the purchase of the refinery to help it get up and running in addition to a “further 10 years at a fair market interest rate to complete the payment of the sum of U.S. $700 million it has offered for the refinery.”
Several Caribbean countries including neighboring Guyana and Barbados had for decades been clients of Petrotrin. Whether they would return when refined out and petroleum products begin to flow again is left to be seen. Guyana is set to become an oil producer in November.
“We did this with the focus on the country, knowing full well that if that refinery had got into any other hands, it would not have benefited Trinidad and Tobago. We would have struggled,” union leader Ancel Roget said as the deal was announced.