The Petrotrin Refinery.

Gail Alexander

The Guaracara refinery will be back on the open market early next month after Cabinet yesterday rejected — for a final time — Patriotic Energies and Technologies’ purchase proposals.

Finance Minister Colm Imbert announced this at yesterday’s post-Cabinet media briefing.

Cabinet had examined a report from the Finance Ministry’s Debt and Economic Management experts on Patriotic’s recent third attempt for the refinery and Paria Fuel Trading Company.

Imbert said Government had expected a firm and binding offer but instead Patriotic submitted two proposals. One would have involved Government putting out TT$5 billion in tax credits to Patriotic’s financiers Credit Suisse (CS). The other arrangement involved an outlay by Government totalling TT$6 billion over seven years.

Imbert added, “In each of the two instances Government was required to finance options in the sum of US$5 billion in the first option and US$6 billion in the second.”

He continued, “And Patriotic wasn’t being asked to put out anything. The country was being asked to pay regarding its own assets and give it away to Patriotic for nothing and Patriotic was to be in a position to be able to mortgage it to a third party.”

“Essentially we couldn’t accept the proposals because the burden on the Government was just too onerous and it would have returned us to where we were (with Petrotrin). Regrettably, Cabinet has concluded we can’t proceed with this matter.”

The outcome dead-ended the 17-month road to the refinery for Patriotic which was announced as Government’s preferred bidder in September 2019.

In its latest third effort, Patriotic was given until February 5 to demonstrate Credit Suisse’s “enthusiasm” to finance the refinery acquisition price of US$500 million and offer a firm binding bid.

Imbert said Patriotic instead delivered an indicative proposal with two financing options — a tax credit purchase facility and a receivables purchase agreement.

He detailed both and implications noted by Ministry experts.

Imbert said Government didn’t get a binding offer but merely proposals that involved large cash outlay by Government.

“This isn’t what was envisaged when the Request for Proposals was made, that a bidder would ask Government to pay for its own asset.”

With proposals also allowing Patriotic to mortgage the assets, he said the greatest risk to Government bearing the risks was loss of the assets.

He also noted implications included that if Government paid the TT$5b or TT$6b, the US$500m funding which CS would give to Government goes to the bondholder who financed Petrotrin’s US$850m bond previously.

Imbert said considering that the refinery was closed due to losses, Government couldn’t afford the billion-dollar losses the proposals — which were not yet an offer — could take T&T back to, with the added risk to the assets of possible mortgage by Patriotic.

Looking at implications, he said Cabinet felt it couldn’t proceed and would have to revert the open market immediately.

Trinidad Petroleum Holdings (TPH) will now explore all options that may exist for use of refineries in the shortest time to determine if there are parties interested in operating the refinery.

TPH will send to Cabinet a proposal for the canvassing of the current market for exploration of options.

A request for proposals will be done within the next three weeks and TPH will invite fresh proposals for refinery lease or sale. On which one, Imbert said Government simply wanted it restarted. Government will now write Patriotic on conclusion of the matter.

“We have to see what we get.”

Imbert said Government will only see what responses are available when the matter is put out. “There may be interest, the only way to know is to go back out.. we don’t have a crystal ball.”

He said it was an uncertain, difficult market and the pandemic had caused closures and cutbacks.

Energy Minister Franklin Khan said there may be interest, “But I say it with guarded caution, we’ll only know when we go out.”

He said the refinery was mothballed with certain steps, “But it won’t last forever, time is of the essence.”

Imbert confirmed oil prices had yielded some more revenue than expected but it didn’t compensate for natural gas revenue issues. Amendment to petroleum law will also be done next month on pricing policy.

Patriotic’s proposal


• ↓Required Government to issue tax credit to Patriotic amounting to US$750m or TT$5b.

• ↓Tax credit could be divided into smaller amounts and transferred to CS such that Patriotic/CS could sell credits to any third party at a rate of US$100m or TT$680m a year. CS could sell to BP, Shell anyone who owes tax to Government and that can offset any tax liability these entities have.

• ↓Therefore this would reduce Government oil revenue by TT$5B and make assets a gift to Patriotic.

• ↓Patriotic would also get free access to refinery and Paria’s assets at no costs and would be able to mortgage assets or pledge it to future financing unrelated to refinery startup – but all risks and expenses being borne by Government and T&T via the tax credit facility and loss of the assets Patriotic didn’t pay for.


• ↓A receivables purchase agreement between Patriotic and CS where the purchaser agrees to put assets in the form of receivables from Trinidad Petroleum Holdings (Petrotrin’s legacy company) for US$500m.

• ↓TPH transfers title of the assets to Patriotic on agreement execution.

• ↓Payment of assets will be on deferred payment schedule with Government rather than Patriotic servicing financing payments over time.

• ↓Arrangement entails irrevocable obligations enforceable against Government which will be required to make Budgetary allocation for TT$864m for seven years – total of TT$6B – to service obligations.

• ↓Government bears all expenses/risks and will have to co-sign and act as guarantor.

• ↓It will also be a Forex leakage and rate risk for seven years.

• ↓Patriotic will have free access to assets and be able to pledge or mortgage them at no risk.


Patriotic, the preferred bidder out of five in 2019, had offered an upfront payment of US$700,000 for the refinery plus US$300 million for non-core assets.

This was rejected by a Cabinet sub-committee in October 2020 on funding issues. OWTU head Ancel Roger sought another look at Patriotic’s offer. Prime Minister Dr Keith Rowley asked the evaluation committee to take a second look and make further comments.

When the second attempt arrived, Imbert in January stated Patriotic was now offering an upfront payment of US$500 million for refinery and fuel trading assets – but Patriotic couldn’t demonstrate ability to pay. After a subsequent Cabinet meeting the company was given 15 days — until February 5 to make an offer including evidence of funding.