PORT OF SPAIN, Trinidad, CMC -The Energy Chamber of Trinidad & Tobago says it welcomes the decision to lease the Guaracara oil refinery to Oando PLC, one of Africa’s largest integrated energy solutions providers.
Late last month, Energy and Energy Industries Minister Stuart Young said the decision was based mainly on Oando’s strong financial track record, particularly its US$1.5 billion acquisition of ConocoPhillips’ assets in Nigeria.
Young, the acting Prime Minister, said the evaluation committee noted that both Oando and the CRO Consortium—comprising three Trinidadian companies and INCA Energy, an American company—had similar capabilities in operating refineries, but Oando’s ability to secure substantial financing in the upstream oil sector gave it an advantage.
“Both of these things were explored, and the evaluation committee recommended to Cabinet that Oando…be the preferred bidder for the lease of the Guaracara refinery,” in south Trinidad, Young said.
The state-owned PETROTRIN refinery was closed in 2018 due to a lack of oil and high import costs. The government restructured the company and invited proposals to restart the refinery.
The government defended the decision, insisting that the company was losing billions of dollars (One TT dollar = US$0.16 cents) annually.
In a statement, the Chamber said it has long supported the refinery privatization to put the asset to productive use.
“Significant capital investment is required to return the refinery’s assets to productive and profitable operation. This investment must be carefully deployed and managed, as it involves substantial risk.
“For this reason, the Energy Chamber has consistently maintained that no additional taxpayer funds from Trinidad and Tobago should be allocated to this investment; instead, the required capital should come from the private sector.”
The private sector group said that given the scale of the investment needed, most of this capital was expected to originate from international sources. However, the Energy Chamber has strongly supported and encouraged local private-sector participation.
The Chamber said it is pleased that an investor has been identified to lease the refinery assets “to restart refining operations.
“Reviving operations at the Guaracara refinery will generate new jobs, create business opportunities, and increase tax revenue for the government. Additionally, foreign direct investment in these assets will contribute to greater foreign currency circulation within the local economy. South Trinidad is home to many skilled workers and experienced contractors, who will play a crucial role in safely and efficiently restarting operations,” it added.
The Chamber said it is prepared to collaborate closely with Oando Trading to ensure the safe resumption of refinery operations, “and we warmly welcome them to the Trinidad & Tobago energy industry.
“We are confident that this marks the beginning of a long and mutually beneficial relationship,” the Chamber said, noting that before its closure, the Guaracara refinery was a significant source of business for many members of the Energy Chamber, including smaller member companies.
It said that in an August 2018 survey of its 400 member companies, 59 percent of the respondents reported having provided goods and/or services to the refinery over the preceding five years.
“At the time of its closure, 39 percent of them were actively supplying goods and/or services to the refinery. On average, these companies derived 25 percent of their business from refinery-related work, with four member companies indicating that the refinery was their sole customer. “
The Chamber said that the total value of goods and services provided by these 75 companies to the refinery in the preceding year amounted to TT$72 million.
and then 