PETROTRIN Refinery at Pointe-a-Pierre. Image: KRISTIAN DE SILVA

It is no surprise that Government has once again rejected the offer from Patriotic Energies and Technologies to acquire the Pointe-a-Pierre Refinery.

This, from former Energy Minister, Kevin Ramnarie, who says based on what the Finance Minister outlined, the offer by Patriotic was not feasible.

“This is my understanding of what the Minister described, yesterday. He said two options were provided—one was a tax credit option, and the other was a receivables option,” Ramnarine said.

“With the tax credit option, the government would have to issuing US$750 million in tax credits to Patriotic, who would then transfer that to Credit Suisse, and Credit Suisse could then sell that to anybody such as BP or Shell for example, who could then use it to reduce their tax liability in T&T,” he explained.

“In effect it would mean the Government of Trinidad and Tobago giving up some TT$5-$6 billion in revenue,” he stated, “which would mean the people of Trinidad and Tobago paying for the refinery for Patriotic Energies, who would then have an unencumbered refinery.”

Ramnarine believes that Patriotic Energies and Technologies failed to secure the finances needed to complete the negotiation.

“It is clear that at no point in time they had access to US$700 million asked in the original offer, or the $500 million which represents the Net Present Value of the US$700 million over a ten-year period.  It is clear that at no point in time they had access to that money or had some concrete guarantee from a bank to provide that money,” Kevin Ramnarine points out.

The former energy minister says it is time to move on from Patriotic and return to the open market.

He notes, though, that Government is doing so in a scenario where the global refining industry is in tremendous crisis.