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Range Resources

Petrotrin collapse

(ASX:RRS / AIM:RRL / PINK:RGRLF & RGRYY)
Informed Discussion. No ramping. No deramping.

Petrotrin collapse

Post Wed Aug 29, 2018 9:02 am

Where does this leave Range?

Published:
Wednesday, August 29, 2018

Petrotrin chairman Wilfred Espinet during a press conference following yesterday’s announcement of the termination of the company’s Refining and Marketing operations. At left is board member Anthony Chan Tack. PICTURE KRISTIAN DE SILVA
With $8 billion in losses in the past five years and a bullet payment of US$850 million due in 2019, Petrotrin chairman Wilfred Espinet says terminating its Refining and Marketing operations and retrenching 1700 permanent and casual employees was the only way to save the company after 100 years of operations in the industry.
In a media conference at the Pointe-A-Pierre Staff Club yesterday, Espinet said a commercial company cannot continue to operate at a loss indefinitely. He said under the current operation, Petrotrin’s value in terms of its balance sheet was deteriorating. Given the mandate by the Government to return the company to profitability, Espinet said the board of directors had to embark on a programme that would stop the deterioration so the company would be able to pay the debt it had accumulated.
Petrotrin has a $12 billion debt and owes Government more than $3 billion in taxes and royalties. The company requires a cash injection of $25 billion to refresh its infrastructure and to repay its debt, Espinet said, noting this money could not be funded initially and it was impossible to keep the refinery working.
In a release yesterday, the company said if left as is, the projected loss would be an estimated $2 billion per year. Espinet added that if the company does not find a solution to its bond payments in the coming weeks there will be an impact on its sovereign rating. He said the money being saved from shelving crude imports will help to repay the loan.
On being appointed, he said the board recruited experts to assess the performance capacity of the company’s assets and it was found that in comparison to other companies in the industry, Petrotrin ranked last.
He could not give a value of Petrotrin’s assets, as he said several were written down but they were intangible.
Further “bad investments” like the World Gas to Liquid Plant exacerbated the current problem, he said. Petrotrin produces 140,000 barrels of oil daily, of which 100,000 are imported crude. These imports require a lot of working capital and contribute to the loss.
“We had to take Petrotrin and redesign it from what it was and we put it into focused companies that would have an exploration and production end and a refinery and marketing unit. These two units were looked at and it was identified from very early that the refining and marketing were not going to survive because it was not profitable. It could not be made profitable, in fact,” Espinet said.
“We had a continued programme of looking at all sorts of ways to make this thing work. We came to the conclusion that if we wanted to be able to pay back the debt and if we wanted to be able to have a profitable company that could be sustained over time, we would have to take out what was the cancer of the operation and that would have been the refining and marketing.”
Noting that retrenchment would be an emotional process for the affected workers, he said the board met with the Government and looked at all options but there was no alternative. He said government accepted the board’s proposal and gave the go-ahead for the closure.
Espinet said this will be the course of action unless the Oilfield Workers’ Trade Union can come up with an alternative that is better than the closure. The OWTU has already presented its proposals to the company, which called for the creation of four entities: Land: North and East (LNE), Trinmar Offshore Operations, Exploration and Production and the Augustus Long Hospital.
OWTU leader Ancel Roget had warned that the refinery will be sold to private investors, but yesterday Espinet said, “There is no likelihood of that refinery being sold.”
Although aged, the refinery had had several upgrades in recent years. Among them is the construction of an Ultra Low Sulphur Diesel Plant, which Espinet said gave it value.
Board member Anthony Chan Tack said the refinery was unreliable and likened it to a taxi that was “more in the garage than on the road.”
No date was given for the restructuring exercise, as Espinet said they wanted to work with the union to determine the best way of retrenchment.
Approximately 2,600 permanent jobs will be affected as the company intends to redesign its Exploration and Production business, which will have approximately 800 workers.
Yesterday, the board met with the OWTU to discuss the company’s plan, which the union rejected.
In April, the company and the union signed a Memorandum of Agreement to establish a working committee to restructure Petrotrin. This included regular meetings, but none were held since the agreement was signed. Espinet explained yesterday that the company wanted to present the union with a workable plan, but all it had was a problem. He said they did not want to approach the union without a feasible course of action.
“We had a problem. We were not going to go to them with a problem. We were going to go to them with a solution. Coming to them with this, therefore, is to us, what the solution is,” Espinet said.
He said the company was asking the union to understand a situation which has a major impact on it and its members. He said the company now has to find an exit plan that makes it less difficult than if the workers were just being thrown on the pavement.
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Re: Petrotrin collapse

Post Wed Aug 29, 2018 9:44 am

Touchstones response is fairly positive.

TOUCHSTONE PROVIDES CLARITY ON PETROTRIN RESTRUCTURING

Calgary, Alberta - August 29, 2018 - Touchstone Exploration Inc. ("Touchstone" or the "Company") (TSX / LSE: TXP) would like to provide clarity on the Petroleum Company of Trinidad and Tobago Limited ("Petrotrin") restructuring announced on August 28, 2018. Petrotrin has announced a restructuring of their operations which will include the future closure of their oil-refinery operations and a redesign of their exploration and production business. Petrotrin has advised that the refining of crude oil will be phased out and that future production volumes will be exported for processing at other facilities. Petrotrin expects that it will begin transitioning to this model in October of this year.

Touchstone believes these changes will have no impact on its current and future operations, as the Company currently sells produced crude oil volumes to Petrotrin under various marketing contracts and does not interact directly with the refinery. The Company expects that it will continue to sell crude oil production to Petrotrin under our existing contracts; however, rather than selling to the Pointe-a-Pierre refinery, it is presumed that Petrotrin will export the product at world pricing.

It is the Company's view that the restructuring will benefit the country in the long-term, as sustainable profitability of the state-owned company will enhance the standard of living in Trinidad and ensure the continued viability of the oil and gas-based economy on the island. Touchstone also recognizes that the announced retrenchment directly impacts a high number of skilled workers in Petrotrin's organization. We are hopeful that as we accelerate our development activities in Trinidad, some of the qualified personnel may find opportunities in our organization.

Paul Baay, President and Chief Executive Officer of Touchstone said, "We believe this is a difficult but necessary step for Petrotrin, and we look forward to working with them as a partner while they transition the business and return to profitability."

Petrotrin has announced that they will be meeting with all stakeholders in the coming weeks to discuss how the proposed changes will be implemented, and Touchstone expects to be an active participant in these.
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Re: Petrotrin collapse

Post Wed Aug 29, 2018 3:56 pm

Range should be on top of this as well with a statement. Just shows the difference in how Touchstone and Range communicate with shareholders.
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Razzledazzle
 
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Re: Petrotrin collapse

Post Wed Aug 29, 2018 4:13 pm

Razz
Range issued a statement earlier this afternoon much along the lines of Touchstone.
Nedkellylandau
 
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Re: Petrotrin collapse

Post Wed Aug 29, 2018 4:17 pm

STATEMENT RE PETROTRIN RESTRUCTURING
Range, an international oil and gas company with assets in Trinidad and Indonesia, and an oilfield services business in Trinidad, provides an update in relation to the restructuring of the Petroleum Company of Trinidad and Tobago Limited ("Petrotrin") announced on 28 August 2018. The proposed changes are anticipated to begin in October 2018, and include the closure of Petrotrin's oil refinery operations at Pointe-a-Pierre in Trinidad and a restructuring of their exploration and production business.
Range currently sells all of its produced oil in Trinidad to Petrotrin under various contracts and not directly to the refinery. The Company expects that following the restructuring it will continue to sell its produced oil to Petrotrin and the restructuring of Petrotrin's operations is not anticipated therefore to have any impact on the Company's operations in Trinidad.
Range looks forward to continuing its long-standing relationship with Petrotrin and working with them during this transition period.
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Re: Petrotrin collapse

Post Thu Aug 30, 2018 4:56 pm

Petrotrin, Range & World Stocks - 3 to add to the "Endangered Species List", if not made it already, along with most of our posters?!!!!!!!!!
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enfranglais
 
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Re: Petrotrin collapse

Post Fri Aug 31, 2018 10:25 am

Looks like the closing of the Petrotrin refinery could eventually be to RRS advantage re storage.

FUEL STORAGE WILL BE KEY TO COMPANY’S FUTURE
Petrotrin will become a terminalling facility, Energy Minister Franklin Khan reiterated yesterday.
“As we speak, it’ll be converted into a terminalling facility that will use up all its tankage (tanks),” Khan said.
Instead of making its own fuel, Petrotrin will in future be importing fuel as a terminalling facility and selling it at internationally competitive prices to NP, he said. The latter then sells fuel at a subsidised price.
Also, the terminalling facility will accomodate imported finished product in bulk towards shipping to the Caricom market, he said.
“So we can service the Caricom market. It’s just that we wouldn’t be producing the fuel, we’ll be importing the fuel for onward distribution, as a shipping centre,” he said, adding Government is also communicating the Petrotrin development to Caricom partners.
On other aspects of the terminalling plan, he said, “There would be bunkering facilities, as there’s tremendous storage capacity at the refinery. That operation will be much scaled down than if you were running a full refinery.”
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Re: Petrotrin collapse

Post Sun Sep 02, 2018 11:31 pm

Lets shut world stocks now please.
Indi
 
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Re: Petrotrin collapse

Post Mon Sep 03, 2018 11:52 am

I'll settle for indi shutting up and moving to adfin.
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Re: Petrotrin collapse

Post Mon Sep 03, 2018 1:06 pm

BEST IF THEY GET RID OF THE FRIGGING FAKE POSTERS FROM ADFVN WHO THINK ITS FUNNY TO POST HERE. WORLDSTOCKS SHOULD STAY
Martini069
 
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Re: Petrotrin collapse

Post Mon Sep 03, 2018 2:05 pm

Agree martini. All the miserable ones should b*****r off from WS and lse and give arch-trolls a hard time trying to out miserable each other on that board.

And this cloning of me, you and QANTAS on this site is designed to upset all world stocks posters. I have only ever had one name per board - in fact, I have no idea how you clone or multi-ID or why you would want to do that. Hope everyone here is happy that I will post as cymrurhydd on here and lewisyfawr on ADVFN and that lewisyfawr on ADVFN is nothing whatsoever to do with me or my views.
cymrurhydd
 
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Re: Petrotrin collapse

Post Tue Sep 11, 2018 5:48 pm

Can I get a job at Petrotrin please?????

KRISTIAN DE SILVA
Big wages and salaries at Petrotrin. An av­er­age $45,000 month­ly wage bill per Petrotrin re­fin­ery work­er, $21,000 month­ly per tem­po­rary work­er and a $616 dai­ly rate for labour­ers, plus a $70,000 month­ly over­time earn­ing for one car­pen­ter.
Those fig­ures were giv­en by En­er­gy Min­is­ter Franklin Khan at Tues­day night’s Peo­ple’s Na­tion­al Move­ment meet­ing at the Mara­bel­la Com­mu­ni­ty Cen­tre where the Petrotrin re­struc­tur­ing plan was dealt with.
Khan said even a labour­er in a com­pa­ny con­tract­ed by Petrotrin to cut the grass re­ceives the same wages un­der the union agree­ment for Petrotrin labour­ers.
“... $616 per day. Yet CEPEP work­ers on­ly get­ting $80 a day,” he said
Khan said wages/salaries oc­cu­pied 52.8 per cent of op­er­at­ing costs. The lat­ter was $4.1 bil­lion an­nu­al­ly and salaries/wages, $2.19 bil­lion. Petrotrin has 3,437 per­ma­nent em­ploy­ees, he added.
“The wage bill is 1.87b an­nu­al­ly. The av­er­age wage bill per em­ploy­ee is $45,000 a month, min­is­ters don’t even take home $45,000,” he said.
The an­nu­al wage bill for the 1,229 non-per­ma­nent (ca­su­al/tem­po­rary) work­ers is $320 mil­lion, a month­ly av­er­age wage bill per tem­po­rary work­er of $21,000, he said.
The com­pa­ny’s over­time (OT) bill is con­stant­ly av­er­ag­ing $22.7 mil­lion per month. He said when he found over­times was “out of whack,” he sought a list of the top OT earn­ers.
“One was a car­pen­ter who earned $70,000 a month in over­time, I don’t know if the re­fin­ery was made of wood,” Khan said, adding they were “by and large re­spon­si­ble for their own demise.”
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Re: Petrotrin collapse

Post Tue Sep 11, 2018 6:55 pm

Remember this is Trinidad dollar not US dollar. Still high though

£1 = $8.75 Trinidad dollar
Martini069
 
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Re: Petrotrin collapse

Post Tue Sep 18, 2018 2:27 pm

From the T&T Guardian two days ago it looks as if there is no one left at Petrotrin to issue permits , buy RRL oil etc etc. If Range can't offload it's oil then there is no point in pumping it.
A real mess and not of Ranges choosing!

State-owned Petrotrin will re­trench all its work­ers and not just those in the re­fin­ery as was pre­vi­ous­ly an­nounced. It means that all its 3,500 per­ma­nent staff will lose their jobs.
This was con­firmed yes­ter­day by Petrotrin’s chair­man Wil­fred Es­pinet, who in an in­ter­view with the Sun­day Guardian ad­mit­ted that the re­trench­ment was dou­ble the 1,700 that was pre­vi­ous­ly an­nounced.
He al­so raised the pos­si­bil­i­ty that the new Ex­plo­ration and Pro­duc­tion Com­pa­ny could have a strate­gic part­ner as it tries to go af­ter the ex­ist­ing oil and make prof­its.
Es­pinet said the de­ci­sion was tak­en to “wipe the slate clean” and en­sure that the new E and P Com­pa­ny was not “sad­dled with the bag­gage of the old Petrotrin”.
“We want to wipe the slate clean. We want a new com­pa­ny that will have no bag­gage and will be in a po­si­tion to gen­er­ate cash flows to pay its debt and make a re­turn to the share­hold­er. In send­ing home all the em­ploy­ees we avoid con­tention on why one per­son was al­lowed to stay on and an­oth­er let go. Plus we will need peo­ple with cer­tain types of knowl­edge and skill sets that may not now ex­ist in the or­gan­i­sa­tion, so we felt we should ter­mi­nate every­one,” Es­pinet told the Sun­day Guardian.
Asked if this meant that the Oil­field’s Work­ers Trade Union would no longer be the recog­nised trade union in this new com­pa­ny, Es­pinet said, “You will have to ask them that your­self.”
Last month, the de­ci­sion to shut down the re­fin­ery was an­nounced and at that time it was re­vealed that the 1,700 work­ers in the re­fin­ery would be re­trenched.
I have no agen­da —Es­pinet
Es­pinet said find­ing a pri­vate part­ner for the new E and P was a dis­tinct pos­si­bil­i­ty, “You know this busi­ness much bet­ter than me and peo­ple tell us that we could sig­nif­i­cant­ly in­crease crude pro­duc­tion, and that is great, but to do that, I know it will cost a lot of mon­ey which we do not have. So I am think­ing we can have a part­ner in the com­pa­ny, we may have a part­ner to do spe­cif­ic things in spe­cif­ic ar­eas. What I am say­ing is that there are many pos­si­bil­i­ties.”
The OW­TU has ac­cused the Gov­ern­ment of shut­ting down Petrotrin in an ef­fort to sell it to the pri­vate sec­tor.
The chair­man al­so tried to de­fend the de­ci­sion to shut down the re­fin­ery de­spite both the Lash­ley and Solomon re­ports nev­er call­ing for it to be closed.
Es­pinet had pre­vi­ous­ly re­lied on both re­ports as stud­ies the Petrotrin Board used in its de­ci­sion to close the re­fin­ery.
He said, “Yes, we re­lied on both those re­ports to help come to a de­ci­sion and yes, nei­ther called for the re­fin­ery to be closed. The Lash­ley re­port called for a change to the gov­er­nance process at Petrotrin to en­sure that there was no gov­ern­men­tal in­ter­fer­ence, and to make it prof­itable. While the Solo­man re­port bench­marked the re­fin­ery and looked at man­pow­er needs.
“I did not bring in Solo­man, they were there be­fore me and that re­port would have seen a re­duc­tion in the staffing at the re­fin­ery by close to 50 per cent and E and P by 60 per cent. It would have re­quired the work­ers to per­haps take a re­duc­tion in pay and ben­e­fits and a change in their pro­duc­tiv­i­ty lev­els. Did you see the OW­TU agree­ing to that? And even af­ter all of that, we need­ed bil­lions just to make the re­fin­ery break even.”
The Petrotrin chair­man said the Solo­man re­port did not have the num­bers in terms of the debt and the cost of a small­er work­force and when the num­bers were added the com­pa­ny and the coun­try sim­ply could not fi­nance it and it was then the de­ci­sion was made to shut down the re­fin­ery.
Es­pinet in­sist­ed he was not brought in to “lick up the OW­TU” and that the sit­u­a­tion had caused him sig­nif­i­cant per­son­al dis­tress, but that he was do­ing what he felt was in the best in­ter­est of the com­pa­ny.
“I have no agen­da, I did not come here to lick up the OW­TU!” he added.
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Re: Petrotrin collapse

Post Tue Sep 18, 2018 3:32 pm

Interesting find. If it was anything serious I would expect Range to release a statement in the next day or so. The last thing Range need though is a bottle neck that reduces output even further.
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Momo
 
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Re: Petrotrin collapse

Post Tue Sep 18, 2018 5:04 pm

Would it at all be in Range's interest to "tie up" with this new E & P company and provide
any expertise ?
grantyw
 
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Re: Petrotrin collapse

Post Tue Sep 18, 2018 5:23 pm

grantyw wrote:
> Would it at all be in Range's interest to "tie up" with this new
> E & P company and provide
> any expertise ?

I doubt if RRL's track record would impress the T&T Govt and they have now appointed a CEO with BP experience.
I can see us with at least a month of zero bopd while the mess is sorted out. Also the fact that all of the staff are being laid off with no guarantee that any of them will be re-employed. The union is almost certainly going to take the view that anybody not being re-employed is being victimised. You can bet your boots that if you were causing trouble within Petrotrin you aint going to be re-employed.
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Re: Petrotrin collapse

Post Tue Sep 18, 2018 7:47 pm

Not gonna help with our cash flow.....lets hope that last million covers it....

Rory had no experience?
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Momo
 
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Re: Petrotrin collapse

Post Tue Sep 18, 2018 11:40 pm

Let’s be honest Petrotrin was a dinosaur that was being milked by everyone involved like it was a cow! The company was a joke and corrupt through and through. In some ways it’s why Range had problems as we were also saddled with the same problems when we took it on, with staff doing very little for silly wages.

To me this is a good thing and not before time. Yes it’s gonna be painful for those on the gravy train all these years and I hate to think what will be getting stolen and ripped off as they leave throughout the doors. But this is about making the main TT oil company and making it fit for the future. Range could have an opportunity here to get involved and make new links and
Contracts with this new company, not saying it will easy but they will be looking for services and we have a service provision company, aporently the best equipped on the island. So who knows stranger things have happened.

But could be a damp squib as well
FUBAR@Birth
 
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Re: Petrotrin collapse

Post Wed Sep 19, 2018 8:18 am

Fair point Fubs especially since all of Petrotrin/Trinmars drilling staff are included in the layoffs..
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Re: Petrotrin collapse

Post Thu Sep 20, 2018 11:02 am

Has anyone emailed Eva re this development?
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Razzledazzle
 
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Re: Petrotrin collapse

Post Thu Sep 20, 2018 1:05 pm

Razzledazzle wrote:
> Has anyone emailed Eva re this development?
Razz
Why don't you email Eva?
I'll tell you her answer now. She will refer you to the RNS that Range put out on the Petrotrin situation. It is unlikely that any member of the company will go into detail on what will happen in the interim until a new Petrotrin arises from the shambles.
If their is an alternative way of exporting oil from the island then fine. If not most of the islands producers are stuffed!
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