Petrotrin Board, Union Disagree to Agree

(Trinidad and Tobago Newsday, Carla Bridglal, 26.Jul.2018) – The board of Petrotrin has outlined a plan to reorganise and restructure the state oil company in a bid to make it more competitive and become a viable asset to the people of Trinidad and Tobago. The unions, including the most vocal majority Oilfield Workers’ Trade Union (OWTU) agree that this is the best strategy to move the company into a sustainable future. Yet nearly four months after the board started the restructuring process, and three months after both parties signed a memorandum of agreement that this is the path they must take, together, the process has reached a stalemate. It’s a strange stasis — both parties agree on the fundamental challenges and solutions, but neither is willing to concede to the other in an effort to get the ball rolling on a mutually beneficial outcome.

Petrotrin's board and union disagree to agree

The union believes the board is reneging on its promise to meet with them. The board insists that the union has not adequately put forward a plan to discuss. The union insists it wants the company divided into four subsets, each with a division head to oversee operations — land exploration, marine exploration, refining and marketing, and the hospital. The board has already split the company into two — upstream (exploration and production) and downstream (refining and marketing). And as far as they are concerned, the union is squabbling over superficial nomenclature. The union, for its part, believes the board lacks the proper expertise to run an oil company.

The board still appears to be going ahead with its 18-month turnaround plan, but if it is to make any material changes to things like staffing, for example, it will need union buy-in.

And while it doesn’t seem like the Board and the union have made any inroads recently, at least for a formal meeting, there was a clash of the titans of sorts, when chairman of Petrotrin, Wilfred Espinet, and OWTU president general Ancel Roget agreed to sit on a panel moderated by journalist and director of the Lloyd Best Institute, Sunity Maharaj last Wednesday, in front of a packed auditorium, filled mostly with a boisterous union crowd, at the Government Campus Plaza Auditorium in Port of Spain.

“Let me make it abundantly clear what they (the unions) are trying to do is make noise of things that are not really important. The important thing is to make the company viable. It has to be competitive and to do that it has to focus on operations as a clear part of the strategy,” Espinet said.

It’s the Board’s mandate to restructure the company so it can become profitable and sustainable, he said. Petrotrin needs to operate like an international company, and think beyond TT oil, he said. Oil is a commodity and to be able to keep operating, the company needs to be able to sell that oil.

The refinery at Petrotrin has a capacity of 140,000 barrels of oil per day (bopd); the company produces about 42,000 bopd — a shortfall of about 100,000 bopd, which must then be imported.

The OWTU agrees. In fact, one of Roget’s major points was that the company needed to be more efficient in hiring skilled personnel to operate and manage the company’s exploration and production activities. There are some sectors, like human resources that are overstaffed, he said, while several technical sections, like marine have several vacancies; the refinery alone has over 100 vacancies for operators, he said. If wages are a significant part of the company’s expenses, it’s only because the shortage of experienced staff meant people had to pull double and even triple shifts.

“We have an overburdened top management structure; the structure we have proposed does not carry all of that ‘fat’ of management because it is not necessary. What is necessary is a management that is focused and accountable,” Roget said.

Time is of the essence, he said, especially if the company is to take advantage of rising commodity prices, and the OWTU wants to begin a process that will move the company forward, with competent management void of politics.

Both men stubbornly stuck to their message, and sometimes tiresome rhetoric. Espinet reiterated the mandate of the Board to go ahead with the reorder regardless, and Roget made veiled threats of “taking a particular course of action to force them to do what they need to do.”

Yet despite the similarities of their arguments, both parties still can’t seem to agree, much to the bemusement of observers like the third panelist, energy consultant Anthony Paul.

“It’s remarkable to me how much convergence I’m hearing and yet we are focusing on the divergence,” Paul said. So while the OWTU and the Board could both agree that governance structures and efficiency in production need to be improved, the one thing that seems to be missing from the equation is a shift in culture. “We know the challenges of getting the right people and competencies; putting in place systems of governance and management for operations. There may be disagreement with numbers and those are easy to fix. But there’s an elephant in the room that is not being addressed yet and I’ll put it out there. It’s about culture. An organisation needs a culture to guide the way they behave and their ethics,” he said, adding that both parties needed to listen to and learn from each other. Petrotrin was facing a precipice, he said, and neither party would fare well if the company went over and for that not to happen, things need to change.

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Author: ENERGY ANALYTICS INSTITUTE (EAI)

Energy Analytics Institute (EAI) is a Houston-based independent think-tank providing unbiased research, analysis, commentaries, opinions and breaking news related to the petroleum sectors in the Latin American and Caribbean regions.

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