The painfully slow negotiations between Patriotic Energies and Technologies Company Limited and a Cabinet sub-committee for the purchase of the Petrotrin refinery at Pointe-a-Pierre inched past another hurdle on Friday.
However, the news that the OWTU-owned energy company just managed to submit its counterproposals within the deadline set by Prime Minister Dr Keith Rowley may not necessarily mean that the refinery sale is close to completion. The ball is now in the government’s court to either accept or reject Patriotic’s latest proposals
If even against the prevailing odds, the negotiations are settled soon there will still be a long road ahead to the resumption of refinery operations.
Shrouded by a non-disclosure agreement, negotiations have been plodding along for more than a year since the September 2019 announcement of Patriotric as the preferred bidder. At that time the refinery, which is 103 years old, had already been mothballed for more than a year following the shutdown of Petrotrin on November 30, 2018.
But even with the secrecy, word had been leaking out about less-than-cordial talks punctuated by long periods of no communications between the two sides. This is worrying since time may not be a luxury that either side can afford in coming to the final deal. The longer the refinery stays down, the greater the prospect of deterioration of that already ageing facility and the larger the sum of money to bring it back to some level of efficient operation.
Patriotic optimistically set a deadline of the third quarter of this year to wrap up the negotiations but took a long time to sort out details related to financing, contracts, labour, license and permits and other details.
At the time that Patriotic was identified as the preferred bidder, Finance Minister Colm Imbert had said they wanted to restart the refinery quickly, raising expectations of a quick settlement of the deal.
More than a year later, with the opposite happening, an uphill battle looms in achieving viable refinery operation, even with the cushion of a three-year moratorium on the US$700 million purchase price and interest, and a further ten years to pay for the refinery.
About $500 million will have to be invested in the refinery’s first year of operation to refurbish and upgrade several units. This includes completion of a 40,000 bpd ultra-low sulphur diesel unit to produce the cleaner-burning fuels now demanded in the global energy landscape. The Pointe-a-Pierre refinery must be brought to the point where it can keep pace with more modern facilities.
These and other factors must be weighing heavily on the minds of energy professionals as they keep a wary eye on those snail-paced talks between Patriotric and the government. Fingers will be kept crossed for a good deal to be thrashed out.
Successful resumption of refinery operations means the creation of new jobs to replace some of the hundreds lost when Petrotrin closed, downstream activities to revitalise the fenceline communities still struggling with the shock of that closure and generation of desperately needed foreign exchange.
We hope for the best.