Imbert: Petrotrin lost $4.2 billion in five years

Imbert, who is also acting Energy Minister, made this revelation in a statement to the House of Representatives.

He said on October 26, 2016, Petrotrin reported a net loss, after tax, of $533 million in its unaudited financials for the year ending September 30, 2016.

Prior to this, Imbert said, Petrotrin declared a total comprehensive loss of $998 million for 2015 and a total comprehensive loss of $341 million for 2014.

“When added, this equates to published losses of $1.9 billion over the last three years,” Imbert said.

However he disclosed, “It has recently come to the Government’s attention that Petrotrin’s refinery operation has been unprofitable for the last five years, from 2011 to 2016, a matter that was not revealed before.” Imbert said rather than declaring these losses, Petrotrin has been carrying them, “as a deferred tax asset to be written off against future profits.” As he explained that a deferred tax asset is treated as an asset on the company’s balance sheet rather than as a liability, Imbert stated it is retained for the purpose of reducing income tax expense in future years.

However Imbert said if the deferred tax asset remains unusable or it cannot be reasonably determined when it can be used, it needs to be written off the balance sheet and gradually brought back into the books whenever profitability occurs. Questioning why Petrotrin never reported this $4.2 billion loss under the former People’s Partnership (PP) government, Imbert said Government is committed to returning Petrotrin to profitability. However he said for this to happen, “the truth about the company’s financial situation must be known to all concerned.” Recalling that Prime Minister Dr Keith Rowley spoke about Petrotrin’s financial challenges in an address to the nation in January, Imbert vowed that Government will determine the reasons for this unacceptable situation.

He also said Government will take the necessary steps to deal, “responsibly, proactively and professionally” with any adverse consequences which may arise from this previously unreported loss. Recalling that wage negotiations at Petrotrin were never settled under the PP, Imbert said Government authorised the company to offer the Oilfield Workers Trade Union (OWTU) a six percent increase for the 2011-2014/2015 period (three percent- first year; two percent-second year, one percent-third year). He said this offer will result in an increased annual recurring cost of $98 million and a backpay liability of $427 million for Petrotrin.

Earlier in the sitting, in response to a question about squatter structures erected near Petrotrin’s pipelines in San Francique, Imbert said the company has been clear that no construction should take place within 21 feet on either side of its pipelines.

Stating this problem has been continuing since April 2014, the minister added, “The issue of compensation or relocation does not arise.”