Energy Minister Franklin Khan yesterday boasted that, under his tenure, the restructuring of Petrotrin became a “success story”.
The minister was speaking on a motion of no confidence moved against him by Pointe-a-Pierre MP David Lee at the Parliament sitting yesterday at the Red House in Port of Spain.
Khan defended himself and was the first speaker on the Government bench.
Petrotrin was a major loss-making enterprise and if not attended to would have had a “systemic impact” on the economy.
He said Petrotrin had a $10 billion debt and also a “bullet payment” of US$850 million which was due in November 2019.
Khan said a bullet payment is “come up with the money or walk”.
He said at that point Petrotrin was owing the State unpaid royalties and taxes amounting to $3 billion.
“This one takes the cake, staff expenditure at Petrotrin made up 50 per cent of its total operating cost. There is no oil company in the world, and I can tell you without fear of contradiction, where staff salaries made up 50 per cent of its operating costs,” he said.
Khan said Petrotrin did not have enough oil to run its refinery operations and it had to import two-thirds of the oil—100,000 barrels a day.
He said on every barrel refined there was a loss of US$5 so in fact the company was importing oil to lose money.
The minister said the Petrotrin board came up with the option to focus on exploration and production, close the refinery and put it on the market for a potential buyer or operator.
He said Petrotrin was restructured and a holding company was formed with four subsidiaries.
“Madam Speaker, I say here today the restructuring of Petrotrin has been a success story and I will go further to say that is probably the understatement of the year,” he said.
He said Heritage Petroleum for its financial year 2019-its first year of operation-achieved a net profit of $1.4 billion.
Khan said for the 12 months ending September 2020 it achieved an additional profit of $884 million after tax.
He said over that period the company paid $1.2 billion in taxes and royalties to the State- something Petrotrin was not doing.
Khan said the locally produced crude was fetching a good price on the international market.
He said when Petrotrin was restructured there were views from critics that the crude has no value.
Khan said Government has also managed to bring one of Petrotrin’s former projects to fruition by working alongside a private entity called NiQuan Energy Trinidad Ltd.
NiQuan, he said, acquired Petrotrin’s incomplete gas to liquids plant in 2018.
He said it has now successfully completed the plant and commenced commercial production.
Khan said this is a 4,000 barrel a day ultra low sulphur diesel production facility coming out of natural gas.
He said on March 8 he will be officially commissioning the plant.