PORT OF SPAIN, Trinidad– Prime Minister Dr. Keith Rowley Tuesday confirmed that negotiations have started with a “preferred bidder” regarding the current procurement process for a prospective purchaser or lessee for the oil refinery Point-a-Pierre, south of here.
Rowley, addressing the three-day Energy Conference of Trinidad and Tobago, told delegates that three final bids were received in April 2022 and were evaluated by Trinidad Petroleum Holdings Limited (TPHL) and the relevant ministry officials.
Oil refinery in Trinidad (File Photo)
He said one of the bidders was selected and has entered into exclusive negotiations with TPHL and the government to negotiate definitive agreements and secure committed financing within a specified period.
“We expect that the process and selection of the preferred bidder will be soon finalized. In keeping with our commitment to transparency and accountability, the relevant details of the outcome of the evaluation of the bids will be disclosed on the completion of the exercise,” Rowley said, without naming the preferred bidder.
The government closed the oil refinery in south Trinidad in 2018 after complaining that it had lost billions of dollars (One TT dollar=US$0.16 cents) annually.
Patriotic Energies, a company formed by the Oilfield Workers Trade Union (OWTU), had entered a bid for the refinery, but the interest collapsed in January 2021.
On Sunday, Opposition Senator Wade Mark told a news conference that the United National Congress (UNC) understands that the US-based company, Quanten, is the preferred bidder for the refinery owned by the state-owned oil company PETROTRIN.
“Government argument to close the refinery…we want to tell Trinidad and Tobago was flawed and based on a misunderstanding of PETROTRIN’s business model and a misunderstanding of the accounts of that company,” he told reporters.
Mark, who valued the refinery at seven billion US dollars, said the question for shareholders and owners of Trinidad Petroleum Company Limited, which was formed after PETROTRIN was shut down, “is who is Quanten Inc?
“What qualifies this company to operate our seven billion US dollar asset refinery? What is this entity’s claim to fame to become the successful bidder,” he added.
But in a statement, Energy and Energy related Industries Minister Stuart Young described Mark’s statements as “destructive UNC mischief.”
He said the refinery sale is being handled by THPL advisers and international experts, who periodically report progress to the Ministry of Finance and Ministry of Energy.
Meanwhile, Prime Minister Rowley told the conference that is being held under the theme “Leveraging the industry’s strengths for the energy transition” that as the global energy transition leads to structural changes in energy markets and the energy mix, there is a risk of diminution of oil and gas revenues, which have been the primary drivers of the country’s socio-economic welfare.
Given the uncertainty of energy transition, it isn’t easy to define the end game, which technology will emerge, and the final energy mix.
“Therefore, it is in our interest to expeditiously take steps to monetize the country’s abundant oil and gas resources. The latest gas reserve audit established that at year-end 2020, technically recoverable resources amounted to 23.2 trillion cubic feet (tcf) and prospective resources at 55.2 tcf. The latest oil audit showed 3P reserves at 455.3 million barrels, and future resources amounted to 3.2 billion barrels, with 90% being in our deepwater province.
“Accordingly, we have embarked on a series of bid rounds which commenced with the deepwater bid-round in December of last year. The closing ceremony for this bid round will be held on Thursday, June 2nd, 2022. There is a large selection of deepwater acreage comprising seventeen blocks.”
Rowley said Trinidad and Tobago is not singular in the matter as several countries are actively promoting bid-rounds at this time, “so we know that we are competing for exploration capital.
“Seven licensing rounds were closed by the first quarter of 2022, and another eight open licensing rounds are expected to close by the end of 2022. Regionally, Suriname, Colombia, and Brazil closed successful bid-rounds. Upcoming 2022 bid-rounds comprise Guyana’s deepwater, Brazil sub-salt, and Ecuador oil blocks.”
Rowley said Trinidad and Tobago’s bid-round series continues with the onshore bid-round.
In September last year, he said the Ministry of Energy and Energy Industries invited nominations for Onshore Acreage for Competitive Bidding.
The Ministry plans to launch the Onshore Competitive Bid Round within this quarter based on the responses. The offshore shallow water bid-round will be next. There are twenty-five open external water blocks for consideration. A date for the launch is not yet determined.
“The proliferation of bid-rounds will increase the competition for capital in an energy market undergoing transition. While we are acknowledged as a proven hydrocarbon province with substantial unrealized potential, we must maintain our competitiveness and resilience.
“This involves the lowering production costs, improving oil and gas production efficiency, an attractive fiscal regime, and a more expeditious execution of the regulatory oversight,” Rowley told the conference.
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