PORT OF SPAIN, Trinidad (Reuters) - Trinidad and Tobago’s Petrotrin beginning in October will halt refining operations due to recurring losses from costly crude imports over the last five years, the state-run oil firm said on Tuesday.
Many of the Caribbean region’s state-owned refineries have struggled in recent years as rising crude prices and high operating expenses cannot be fully recouped from fuel sales to consumers.
Petrotrin currently produces 40,000 barrels per day (bpd) of crude, while its refinery operates at a capacity of 140,000 bpd, which requires the crude supplies to be imported.
“We have to go to the market to buy about 100,000 barrels of oil (per day) to make up the shortfall. This results in a net loss in foreign exchange,” Petrotrin Chairman Wilfred Espinet said in a statement.
Petrotrin requires a cash injection of nearly $4 billion to remain in operation, upgrade its infrastructure and repay its debt. The firm has lost over $1 billion in the last five years and racked up nearly $2 billion in debt.
It also owes the government about $500 million in taxes and royalties.
Shutting the refinery is expected to affect 2,600 permanent jobs, including 1,700 direct jobs at the facility, Petrotrin said.
To provide for the Caribbean archipelago’s gasoline, diesel and aviation fuels needs, Petrotrin plans to import 25,000 barrels of oil equivalent per day. Any crude produced will be exported, it said.
Reporting by Linda Hutchinson, writing by Marianna Parraga, editing by G Crosse