TT’s Minister of Finance clarifies Patriotic offer for Point-a-Pitre oil refinery

Colm Imbert, Trinidad & Tobago’s Minister of Finance has moved to scuttle some news reports which said that Point-a-Pitre refinery bidder Beowulf Energy had offered more for the refinery than winning bidder Patriotic Energies and Technologies – which is wholly owned by the Oilfield Workers’ Trade Union (OWTU).

Beouwulf Energy was one of five bidders who made the final cut. Others on the final list – as whittled down by the government – were Glencore, Edgewood Holdings, Klesch and Patriotic.

Located in Dover, Delaware in the United States, Beowulf Energy LLC generates electricity. According to Bloomberg, the Company develops and operates fossil-fueled and renewable power facilities. Beowulf Energy’s primary market is North America.

Colm Imbert, in a release posted on the Ministry of Finance website, described as “grossly inaccurate and unprofessional” an article in Newsday about the selection of the OWTU as the preferred bidder.

Imbert stated, “The Newsday has claimed that Beowulf, one of the unsuccessful bidders for the Refinery, offered a payment of US$42 million per month for 15 years for the Refinery. If that were true, it would mean that Beowulf offered to pay US$7.5 billion over a period of 15 years, as compared to the US$700 million offered by the OWTU. However, that is NOT TRUE.”

He repeated his statement to Parliament on September 2019 which said Beowulf offered to pay US$42,000 per month, NOT US$42 million per month.

On September 20, Imbert had announced that Patriotic Energies and Technologies had been selected as the preferred bidder for the Guaracara Refining Company, the entity set to run the Pointe-a-Pierre refinery previously operated by Petrotrin.

Pointe-a-Pierre refinery ceased on 30 November 2018. In his statement to Parliament the Minister said, ‘The refinery was plagued by high and increasing debt, low productivity levels, escalating manpower costs, and an expenditure pattern of habitually surpassing its earnings and income. The refinery lost billions of dollars every year.’

Subsequent to its closure,  the TT government set up Trinidad Petroleum Holdings (TPH), and restructured the company’s assets into four subsidiaries: Heritage Petroleum Company, for exploration and production operations; Paria Fuel Trading Company; Legacy Petrotrin, which manages all legacy items of the former Petrotrin and Guaracara Refining Company, which will manage the Pointe-a-Pierre refinery.

In stage 1 of the bidding process for the refinery – which the government announced it intended to sell – 77 Expressions of Interest were submitted.

The bidders were whittled down to a shortlist of five: Beouwulf Energy, Glencore, Edgewood Holdings, Klesch and Patriotic.

Following review of offers, on 20 August Beowulf, Klesch and Patriotic submitted compliant binding offers for the purchase or lease of the refiner – but Patriot has emerged as the preferred bidder.

Imbert explained in Parliament that ‘Patriotic was the only bidder which offered an upfront payment consideration. Their proposal indicated upfront cash of US$700 million for the refinery assets plus US$300 million for the non-core assets of Legacy Petrotrin.”

Noncore assets include a hospital. But the non-core assets were not offered for sale by Government. 

Imbert said Beowulf offered no upfront consideration, but instead proposed a lease payment of US$42,000 per month over a 15-year initial term, and future 50/50 profit sharing contingent on Beowulf recovering its capital investment and achieving a 15 per cent internal rate of return (IRR).  Klesch’s proposal indicated that the only payments to the Government would be through taxes.

Imbert said in Parliament that Patriotic would have one month to present to the Evaluation Committee for the sale of the refinery with “a satisfactory and comprehensive work plan on how it intends to complete the process going forward.’