In Part Two of his pre-recorded lecture, aired last night on television and broadcast over radio, Prime Minister Dr Keith Rowley laid out his government’s roadmap for taking T&T out of the economic doldrums and into prosperity, with diversification being the cornerstone of his presentation.
He again warned the nation, to never forget what the previous government did to this country’s economy through waste, corruption and squandermania.
Armed with graphs, Rowley spent an hour showing how his government had kept the country afloat over the past three years even while it meant the inevitable loss of thousands of jobs as state-owned oil company Petrotrin was retrofitted into the Heritage Oil Company.
He said while T&T is an oil and gas economy, there was need to diversify into other areas including agriculture, the production of aluminium cables and sheet aluminium and construction of the La Brea drydock which he said would create many jobs. Rowley said that some of the actions of the previous government had brought national revenue down.
“We had to negotiate a gas price with the gas producers otherwise they had downed tools with respect to drilling in the years going forward. You recall I went to a meeting in Houston with Minister (Stuart) Young. It was to encourage the closure of the gas price negotiation between BP and the NGC. We eventually got that done, and the minute we got a gas price agreed that BP and the country could accept, US$10 billion in investments were kicked off in T&T.”
“Because we have a good gas price and we now have a fair supply, and we have downturn access to the Venezuelan gas, the future of T&T as a gas producing and gas using country is now more secure. This hole that we were in, we had serious liabilities now because the companies that we were contracted to buy this gas made claims that the contracts allow for $4.5 billion, because if they didn’t take the gas that we supplied, then we could make claims against them. But if we can’t supply the gas that they wanted for their plants, they now make the claims against us,” Rowley said.
He said for the last year, government has been engaged with these companies in trying to negotiate away this liability for $4b. He said it was not over, they got good results and while it was not choking us, some of it was still around our necks.
“We own an oil company. It is one of the few oil companies in the world owned by the people. When that collapse took place in 2014 it affected all countries like us. Up to the point when we intervened, the prior business of Petrotrin delivered to T&T $13b in debt and the only reason people were lending Petrotrin money was because the Government owned it 100 per cent. It was against the understanding that if the company could not pay, the Government will stand the cost for the company.”
He said $4b in royalties were not paid just to allow the company to continue to stay in business, adding that was the only company in the country that was not paying taxes. He said the forecast for the company was $2b in losses every year going forward.
“We restructured the company in 2018. The debt owed by Petrotrin would be serviced by the Heritage Petroleum Company, a subsidiary of Petrotrin, so it would relieve the Finance Minister of the burden of servicing Petrotrin’s debt, which left more money for the minister to do other things in the country.”
“An oil company in TT properly managed, properly resourced should be able to produce enough oil to turn a profit. To do that we were affecting a lot of status quo and some people are not going to be happy. We couldn’t make an omelet without breaking the egg, and hopefully we would have a meal for all after breaking the egg, but we never killed the goose that laid the golden egg.”
Rowley said in the way of diversification the new Phoenix Park will be used for manufacturing aluminium cables and make sheet aluminium and aluminium wheels for cars. He said the methanol plant will also be on stream. He said the drydock at La Brea will invite ships to come in for repairs.
He also said that he has approached the private sector with proposals to invest in agriculture in the over 1,000 acres of agriculture land that has been laid to waste in Aripo. “This is job creation. These areas of employment will generate jobs.”