Who’s watching Petrotrin’s back?

Last year’s performance of the Petroleum Company of Trinidad and Tobago Limited (Petrotrin) resulted in the oil company recording its highest ever revenue — (TT)$11.8 billion and declaring a net profit of (TT)$339.6 million before adjustment for the recognition of the surplus on the Pension Plans. But even before that outstanding performance, the company had contracted a foreign company to develop a Business Improvement Plan (BIP) for the Refining and Marketing (R&M) Group of the company. The Plan was developed over the five-month period December 2002 to April 2003. Using their proven methodology, Shell Global Solutions assessed Petrotrin’s position at that time — benchmarking against top performers determining gaps in performance levels and analysing, ranking and prioritising opportunities to close those performance gaps. These opportunities formed the basis of the BIP and subsequently the formulation of the programme dubbed “Journey towards Excellence.”

This programme, according to a Q&A in PETROConnect, a bi-weekly publication of the company, “involves the implementation of a number of inter-related initiatives in the Refining and Marketing Group with the primary objective of ‘realising the full potential of existing resources; our people, our years of experience and our plant and equipment.’ “The programme will address the areas where we are currently under-performing and will deliver sustainability for the future,” added the article. One is left to wonder however, whether the move to hire this company to assist Petrotrin in making significant improvements was actually pushed by the fact that in the same publication, Petrotrin was described as being “among the worst performing refineries.”

PetroConnect claims that the main objective of the new programme was to make Petrotrin more competitive and viable to ensure survival. “Over the last 10 years we have participated in several refinery benchmarking exercises and we have consistently placed at the low end of the fourth quartile. “Simply put, we are among the worst performing refineries and our performance must improve or we will go out of business. This initiative of Refinery Performance improvement is designed towards improving our performance to guarantee our future existence,” stated the paper. Implementation of the BIP, together with some other major capital projects are necessary at this time to mitigate the significant threats that exist to Petrotrin’s core markets due to impending stringent product specifications, fuel substitution, low cost competitor refineries, competitor refinery upgrading, loss of the Common External Tariff (CET) and the effects of the Free Trade Agreement of the Americas (FTAA) that is scheduled to come on stream in 2005. “Qualitatively the programme targets financial benefits of (US)$70 per barrel, which amounts to around (US)$35 million annually.”

While the R&M Group will take the lead in the effort of improving Petrotrin’s overall performance, the learnings and best practices that would have been adopted, having proven to have yielded benefits, would be transferred to other Groups within the organisation like Exploration and Production, Trinmar operations and Corporate. Participation by Petrotrin’s personnel in the programme will comprise 24 staffers from R&M and Corporate on a full-time basis for extended periods. “Additionally, the initiatives will be implemented in the Assets through Action Teams and over 100 of our people will comprise these Action Teams and will receive support/transfer of skills/knowledge from Shell Global Solutions’ experts. A burning question was whether or not the exercise would result in manpower reduction.

The answer came back simply :  “This is not an objective of this programme. This programme will introduce new and different work processes and may result in people doing different things or achieving the same work objective in a different manner. This will be done in accordance with Petrotrin’s Policies and Procedures and the relevant Collective Bargaining Agree-ments.” This was further entrenched when it was emphasised that the union was actually participating in the programme. The president general of the Oilfield Workers Trade Union (OWTU) is a member of the Programme Steering Group. There were two union representatives in the Project Team for Phase 1 of the programme and there will be one union representative on the Programme Task Force for this implementation phase of the programme. In addition to the union, there is overwhelming support and commitment from the company’s executive management team, including Wayne Bertrand, President, Operations; Rawlingson Agard, vice president, Human Resources and Corporate Services and Kelvin Harnanan, vice president, Marketing.

Refining & Marketing as well as Corporate Services within Petrotrin have a number of other initiatives, either already implemented or to be implemented and therefore the question of duplication arises. In defence of the “Journey” it has been described as “holistic in that it addresses all the areas that influence performance in R&M, as well as it is integrated, as it takes into account the inter-relationships among the separate areas.” The “Journey” is focused “on taking actions that improve the business, both on a day-to-day basis and in the longer term. The new knowledge and experiences that Shell Global Solutions brings will be oriented around real events and will involve lots of workshops, coaching and guiding through co-creation of new ways of working. “The programme is also unique in that Shell Global Solutions is sharing in the risks and rewards associated with the initiatives, by having a substantial portion of their fees linked to measured improvements in Petrotrin’s performance.”