debut: 2/16/17
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The Troubling Legacy of Trinidad and Tobago's Oil Refinery Mismanagement
Trinidad and Tobago, once a thriving player in the oil and gas industry, now faces a sobering reality of mismanagement, squandered opportunities, and mounting costs that have left the nation grappling with an uncertain energy future. The story of the country's oil refinery—purchased from Texaco and burdened by poor decisions—serves as a cautionary tale of how overambition, political entanglement, and outdated practices have led to economic inefficiency and stagnation.
At its peak, Trinidad and Tobago produced approximately 90,000 barrels of oil per day. This was a respectable output for a small island nation, but as is the nature of oil fields, production began to decline after reaching its zenith. Today, production hovers around 55,000 barrels per day—nearly half of the former high point.
This decline was neither unforeseen nor unmanageable, yet the decisions made during that period have compounded the nation's energy issues.
The Texaco refinery acquisition was a pivotal moment. Texaco, seeing little value in the facility, was preparing to scrap it when Trinidad and Tobago stepped in to purchase it.
The country not only overpaid for this outdated refinery but then embarked on an ambitious—and ultimately disastrous—project to rebuild and expand its capacity.
Under the stewardship of Malcolm Jones and his team, the plan was to upgrade the refinery to process 100,000 barrels per day, doubling its original capacity of 50,000 barrels.
What followed was a series of delays, cost overruns, and mismanagement that ballooned the total expense to an astonishing $20 billion.
This ill-conceived expansion proved to be a financial sinkhole. With production dwindling, the country could not meet the refinery's expanded capacity.
To fill the gap, Trinidad and Tobago turned to the oil spot market, purchasing crude at high prices to keep the refinery operational.
This was an expensive and unsustainable practice, compounded by the fact that the refinery itself was still running on analogue systems, outdated, and increasingly inefficient.
Its proximity to the saltwater of the Gulf of Paria hastened its deterioration, leaving the nation with a rusting relic incapable of meeting modern standards.
In hindsight, a more prudent decision would have been to focus on modernizing the refinery to process 50,000 barrels per day with computer-controlled systems.
Such a move would have reduced personnel requirements, streamlined operations, and cut costs significantly.
But strong union pressure and political considerations—votes tied to refinery jobs—prevented this streamlined approach.
The situation was further muddied by allegations of corruption, with links to political figures like Prime Minister Rowley's associates, creating a scandal that the government sought to avoid by ultimately shuttering the refinery.
The closure, however, has not brought cessation to the issue.
For nine years, the refinery has been mothballed, costing taxpayers a staggering $1 million USD per month just to maintain its dormant state.
That's $108 million wasted over nearly a decade, with no clear resolution in sight.
Meanwhile, the government has also been paying another $1 million USD monthly to Venezuela for natural gas from the Dragon Field—an agreement that has yet to yield any tangible results.
Nine years of payments, and still, the Dragon Field project remains in limbo, with no extraction or production to show for it.
The broader energy sector is also in peril. No significant oil or gas discoveries have been made under the current administration, leaving the country increasingly reliant on dwindling reserves.
The once-thriving Point Lisas Industrial Estate, home to petrochemical plants, is now a shadow of its former self, with plants being mothballed or operating at only 50% capacity.
The government has recently put out tenders to attract new exploration, but such efforts typically take a decade to bear fruit—time the nation can scarcely afford to lose.
When comparing Singapore's oil refining industry to that of Trinidad and Tobago, the contrast is stark and, frankly, illuminating.
Singapore, a small island nation with no natural oil reserves, has not only managed to thrive in the global energy market but has also established itself as a leader.
With its refineries processing a staggering 1.3 million barrels of oil per day, Singapore's refining industry stands as the most profitable in the world.
Meanwhile, Trinidad and Tobago—a country rich in natural resources—has struggled to maintain even basic efficiency in its energy sector.
The difference lies in strategy, vision, and execution.
Trinidad and Tobago's energy woes are emblematic of a broader failure to adapt to changing circumstances and prioritize long-term sustainability over short-term gains.
The decisions made over the past two decades have left the country paying a heavy price, both financially and in terms of lost opportunities.
The question now is whether the nation can learn from these mistakes and chart a new course—one that embraces innovation, transparency, and strategic planning to secure a brighter future for its energy sector.
.Sarge
Trinidad and Tobago, once a thriving player in the oil and gas industry, now faces a sobering reality of mismanagement, squandered opportunities, and mounting costs that have left the nation grappling with an uncertain energy future. The story of the country's oil refinery—purchased from Texaco and burdened by poor decisions—serves as a cautionary tale of how overambition, political entanglement, and outdated practices have led to economic inefficiency and stagnation.
At its peak, Trinidad and Tobago produced approximately 90,000 barrels of oil per day. This was a respectable output for a small island nation, but as is the nature of oil fields, production began to decline after reaching its zenith. Today, production hovers around 55,000 barrels per day—nearly half of the former high point.
This decline was neither unforeseen nor unmanageable, yet the decisions made during that period have compounded the nation's energy issues.
The Texaco refinery acquisition was a pivotal moment. Texaco, seeing little value in the facility, was preparing to scrap it when Trinidad and Tobago stepped in to purchase it.
The country not only overpaid for this outdated refinery but then embarked on an ambitious—and ultimately disastrous—project to rebuild and expand its capacity.
Under the stewardship of Malcolm Jones and his team, the plan was to upgrade the refinery to process 100,000 barrels per day, doubling its original capacity of 50,000 barrels.
What followed was a series of delays, cost overruns, and mismanagement that ballooned the total expense to an astonishing $20 billion.
This ill-conceived expansion proved to be a financial sinkhole. With production dwindling, the country could not meet the refinery's expanded capacity.
To fill the gap, Trinidad and Tobago turned to the oil spot market, purchasing crude at high prices to keep the refinery operational.
This was an expensive and unsustainable practice, compounded by the fact that the refinery itself was still running on analogue systems, outdated, and increasingly inefficient.
Its proximity to the saltwater of the Gulf of Paria hastened its deterioration, leaving the nation with a rusting relic incapable of meeting modern standards.
In hindsight, a more prudent decision would have been to focus on modernizing the refinery to process 50,000 barrels per day with computer-controlled systems.
Such a move would have reduced personnel requirements, streamlined operations, and cut costs significantly.
But strong union pressure and political considerations—votes tied to refinery jobs—prevented this streamlined approach.
The situation was further muddied by allegations of corruption, with links to political figures like Prime Minister Rowley's associates, creating a scandal that the government sought to avoid by ultimately shuttering the refinery.
The closure, however, has not brought cessation to the issue.
For nine years, the refinery has been mothballed, costing taxpayers a staggering $1 million USD per month just to maintain its dormant state.
That's $108 million wasted over nearly a decade, with no clear resolution in sight.
Meanwhile, the government has also been paying another $1 million USD monthly to Venezuela for natural gas from the Dragon Field—an agreement that has yet to yield any tangible results.
Nine years of payments, and still, the Dragon Field project remains in limbo, with no extraction or production to show for it.
The broader energy sector is also in peril. No significant oil or gas discoveries have been made under the current administration, leaving the country increasingly reliant on dwindling reserves.
The once-thriving Point Lisas Industrial Estate, home to petrochemical plants, is now a shadow of its former self, with plants being mothballed or operating at only 50% capacity.
The government has recently put out tenders to attract new exploration, but such efforts typically take a decade to bear fruit—time the nation can scarcely afford to lose.
When comparing Singapore's oil refining industry to that of Trinidad and Tobago, the contrast is stark and, frankly, illuminating.
Singapore, a small island nation with no natural oil reserves, has not only managed to thrive in the global energy market but has also established itself as a leader.
With its refineries processing a staggering 1.3 million barrels of oil per day, Singapore's refining industry stands as the most profitable in the world.
Meanwhile, Trinidad and Tobago—a country rich in natural resources—has struggled to maintain even basic efficiency in its energy sector.
The difference lies in strategy, vision, and execution.
Trinidad and Tobago's energy woes are emblematic of a broader failure to adapt to changing circumstances and prioritize long-term sustainability over short-term gains.
The decisions made over the past two decades have left the country paying a heavy price, both financially and in terms of lost opportunities.
The question now is whether the nation can learn from these mistakes and chart a new course—one that embraces innovation, transparency, and strategic planning to secure a brighter future for its energy sector.
.Sarge
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