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posted 16 Oct 2018, 11:15 by Gerry Kangalee   [ updated 16 Oct 2018, 12:28 ]
Selwyn Lashley hands over the report to the Prime Minister
Cabinet by Minute No. 365 of February 23, 2017, agreed to the appointment of a Team to conduct a review of the operations of Petrotrin and make recommendations for its restructuring. The Team comprised the following persons: Selwyn Lashley, Permanent Secretary in the Ministry of Energy; Helen Drayton; Robert Riley, former CEO of BPTT; Wilfred Espinet; Gregory Marchan; David Abdulah and Professor Chandrabhand Sharma, who resigned from the Committee after two meetings.

The committee was appointed to conduct a review of the operations of Petrotrin; make recommendations for the restructuring of the Company; submit its First Report on June 1st, 2017. It has become known as the Lashley Report

It did report on June 17th 2017 and made two recommendations which in its own words are: ‘the strategic decisions, which must be taken to ensure that subsequently, the Company implements the appropriate technical, financial and management actions necessary for it to become “a sustainable profitable entity that pays taxes, meets the HSE standards of the Nation, pays dividends, and earns significant foreign exchange.” ‘

The recommendations speak of what it calls Governance Arrangements: “The members of the Board of Directors are selected through a process, which provides for comprehensive and transparent input and feedback from key stakeholders to ensure that members possess the relevant experience and capabilities to address priority matters critical to the transformation and sustainable development of the company.

Petrotrin adopts and adheres to the laws and regulations that apply to publicly listed companies, especially with respect to transparency and accountability.

Petrotrin adopts a policy whereby the Board of Directors terms of office are cycled in such a manner as to ensure that, at all times, there is continuity of membership of at least 50% of the Board.”

The other recommendation deals with Organizational Structure: “To enable the Executive and Senior Management to focus on strategic and operational responsibilities of managing profitable businesses for which they will be held accountable”

a. The establishment of three operationally independent business units: Trinmar; Land Exploration and Production; Refining and Marketing

b. That each of these business units be led and managed by persons who would be responsible for organizing all the resources (financial, human, physical) within the unit in order to achieve the established targets; and be held accountable for the business’ performance.

c. That the Office of the President of the Company be accountable for ensuring the implementation of policy across all business units, providing oversight and strategic leadership of the Company.”

They did not recommend shutting down the company! I looked carefully and saw no such recommendation.

Franklin Khan: the smiling assassin
On January 22nd 2018, Minister of Energy, Franklin Khan, the Smiling Assassin, stated: “The major oil producer in Trinidad and Tobago is Petrotrin, which together with contracted services account for approximately 58 per cent of the country’s total production. In 2017, a new Board of Directors was appointed with a mandate to return the company to profitability and its management as a private commercially oriented company...

...The Board is currently working on a plan for the restructuring and charting the company back to viability. However, before any decision is taken on these matters there will be widespread consultations with all stakeholders and particularly the employees’ union representative.”

Mandate to return the company to profitability! Widespread consultations with all stakeholders and particularly the employees’ union representative! Not a whisper about shutting down!

On March 14th 2018, Minister Khan addressed the conference ENERGY SPOTLIGHT OUR OIL, OUR GAS, OUR FUTURE at the HYATT REGENCY, PORT OF SPAIN. He informed the audience that the government “Issued a mandate to the restructured Petrotrin Board of Directors to return the company to viability pursuant to the Lashley Report...” Not a word about shutting down. The mantra was restructuring...restructuring...restructuring...!

On April 3rd 2018 the Company and the Union signed a memorandum of agreement, which stated, among other things,: “The executive of the Company agrees to meet on a monthly basis with the Union’s Executive (“the Executive”) for the following specific objective:-

a. To progress the implementation of the organizational structure, skill/competencies, work process, customs and practice and the manpower requirements in all areas of the Company’s operations which will ensure the Company’s survival, sustainability and profitability; and

b. To review, monitor and ensure progress of the Working Committees described in Article 2 of this MOA; and

c. To resolve issues which may arise from time to time within the Working Groups.

Petrotrin's transition team: Wilfred Espinet; Reynold Adjodhasingh; Robert Riley; Anthony Chan Tack.
The Company and the Union agree to the establishment of a Working Committee comprising representatives of both the Company and the Union that will work over the next eighteen (18) months to address, resolve and agree on the four (4) organizational structures, work processes and skill/competencies and manpower requirement which will make the Company internationally competitive thus ensuring its survival, sustainability and profitability. The parties agree to a timetable for these meetings commencing in the month of April, 2018 with the enhancement of operational efficiencies, reduction of waste and the promotion of the business of the Company.”

Pretty specific objectives with timelines, don’t you think?

In his Midyear budget review on May 10th Finance Minister, Colm Imbert stated:

“It is imperative, therefore, that in addition to transforming Petrotrin into a viable and profitable organization, we must also complete the work on an appropriate formula that allows the price of fuel at the pump to move up and down.” (see presentation here)

On June 25th 2018 Minister of Energy, the ubiquitous Franklin Khan, addressed the Society of Petroleum Engineers of Trinidad and Tobago’s 2018 ENERGY RESOURCES CONFERENCE. Hyatt Regency, Port Of Spain. He stated, among other things:

“Under my watch, Petrotrin has to and is going to change. To turn around Petrotrin there has to be: (1) New Leadership (2) New Technology (3) The Right Skills Set (Petroleum Engineers and Geoscientists) and (4) Significant Capital Injection.

Arising from the mandate given by Government to the Board of Directors that Petrotrin must become a viability (
sic) entity, the Board has been taking steps to manage and reduce costs and to expand its productive base.
Image result for petrotrin south west soldado
In this regard, the company has set out an ambitious work programme aimed at improving oil production. The salient elements of the programme includes the continuation of its asset integrity programme, drilling and workovers both on-shore and off-shore, the implementation of its South West Soldado Project and increasing Joint Ventures. Based on these initiatives Petrotrin has projected the increase in production by as much as 35%.”

Wow! Asset integrity programme; drilling and workovers onshore and offshore, implementing the South West Soldado project. What a programme! Anything about shutting down?

On June 29th 2018, the Ministry of Energy issued a media release signed by Minister Khan, which stated, inter alia, “In 2016, a Sales and Purchase Agreement (SPA) was executed among WGTL Trinidad Limited (In Receivership), the Receiver and NiQuan.

The closure of the SPA, is subject to the fulfilling of conditions precedent, which includes the securing of a Gas Sales Contract for a guaranteed supply of natural gas for the period of the Product Offtake Agreement with Petrotrin...Given the delay in the completion of Petrotrin’s Ultra Low Diesel Project, the offtake from the GTL Plant will allow Petrotrin to meet in the interim environmental standards for gasoil.

With effect from January 1, 2020 Petrotrin will be unable to supply bunker fuel to ships unless it meets the new global limit of 0.5% Sulphur mandated by the International Maritime Organization.”

Read the above quotation again. The Niquan deal is “subject to the fulfilling of conditions precedent which includes the securing of a Gas Sales Contract for a guaranteed supply of natural gas for the period of the Product Offtake Agreement with Petrotrin...”

So up to the end of June 2018, the government was saying that Petrotrin had an offtake agreement with Niquan which would allow Petrotrin to meet environmental standards for gasoil, because after January 1st 2020, Petrotrin had to meet “the new global limit of 0.5% Sulphur mandated by the International Maritime Organization.” It is clear that at that time the government was assuming or pretending that Petrotrin would be in operation in 2020.

If that was the assumption, what happened between the end of June and the end of August when it was announced that Petrotrin would be shut down?

Espinet deposed on affidavit to the Industrial Court in Application no. 7 of 2018 that, “The Board therefore went to the Cabinet to
Image result for trinidad industrial court
explain the situation and received its approval to move forward with the closure of the Company and the termination of its employees.”
This meeting with the Cabinet, according to Espinet, took place around the 3rd week in August 2018.

The cabinet minutes, filed in the matter by the Attorney General, tell another story. The Industrial Court points out that it states that the “Board of Directors of the Company made a presentation to Cabinet in July 2018 (not around the 3rd week in August) outlining the options for the way forward with respect to the restructuring of the Company. The Board informed and recommended to the Cabinet that the most viable and economic of these options as the way forward for the Company would be a structure which does not involve refining operations.

The Cabinet accepted this recommendation of the Board and advised the Board to present the decision for the restructuring of the Company to the employees’ representatives (the Union) and the employees. The advice which the Cabinet gave to the Board, to present the decision to Union and to the employees, according to the Cabinet minute, was given in July 2018." 

They contradict each other about the date of the supposed presentation to Cabinet. They have different recollections about the supposed advice given. Espinet claims that the Board got “approval to move forward with the closure of the Company and the termination of its employees.”

The Cabinet’s recollection is that “The Board informed and recommended to the Cabinet that the most viable and economic of these options as the way forward for the Company would be a structure which does not involve refining operations.”

One say shut down the company and terminate the employees; the other one say cease refining. When two or more confidence tricksters embark on a scam, their first task is to get their stories straight.

Ever since, the stories/narratives have been changing. Every Monday morning it’s a different take on the Petrotrin issue from different members of cabinet. The Express of October 16th 2018 cites Minister of Everything Stuart Young as challenging MP Moonilal to say where it was stated that Petrotrin would be shut down as opposed to the refinery being shut down.

O, what a tangled web we weave when first we practise to deceive! The question remains: What happened between the end of June and August 28th that led to the shutdown of Petrotrin?
Gerry Kangalee,
16 Oct 2018, 11:15
Gerry Kangalee,
16 Oct 2018, 11:15