FOR several troubling reasons, the Petrotrin-Oando deal is shaping into another billion-dollar Niquan scandal.
This means taxpayers could face huge financial burdens as a result of a further reckless and unjustifiable decision with respect to the Petrotrin refinery.
Like Niquan, Oando has no relevant industrial expertise, is in poor financial health, and has governance issues.
Oando, a Nigerian-owned energy corporation with a tortured history, is being awarded the prized Pointe-a-Pierre refinery ahead of nine other bidders.
In addition to years of clashes with the authorities and regulators, the company has a high debt-to-equity ratio, with liabilities outstripping assets.
There are ongoing cash flow challenges, negative shareholder equity, and steep receivables.
Oando’s stock value slumped by 28 per cent two weeks ago.
Cranking up the refinery would cost at least US $1 billion, and there is no evidence the successful bidder has such funds available for investment.
Experts are asking whether Oando executives would be mandated to put up a bond to ensure the company would not walk away from the agreement.
With the refinery requiring 80 million standard cubic feet of gas a day, questions about being asked about where Oando would source the feedstock.
The query is even more pressing since the rich Dragon Gas field is not likely to be explored in the near future.
A knowledgeable industry official stated: “The country deserves full disclosure on these matters.”
The appointment of a Cabinet Committee headed by Camille Robinson-Regis to make a final recommendation has also aroused anxieties.
There were no industry experts on the committee.
In 2018, the Rowley Government handed the collapsed World Gas-to-Liquids (WGTL) project at Pointe-a-Pierre to Niquan Energy, a company without the required experience and financial backing.
Prime Minister Rowley hailed the decision, boasting that the country will benefit from $2 billion in taxes and statutory payments.
Sceptics branded the move as that of a thief-in-the-night that could not be explained or defended.
Niquan soon ran into financial troubles, and in 2023 landed in a liquidator’s hands.
Taxpayers were left with multi-million-dollar unpaid invoices for natural gas.
The Niquan collapse followed the initial WGTL outrage, the single largest waste of taxpayers’ money in history, totalling some $3.1 billion.
The project was initiated under the chequered Petrotrin leadership of Executive Chairman Malcolm Jones during the Patrick Manning administration.
The Kamla Persad-Bissessar Government filed litigation against Jones and other company directors for mismanagement and breach of fiduciary duties.
The Rowley Administration withdrew the charges, without a public explanation.
As with the Oando deal, experts warned the authorities that Petrotrin’s partners did not have the expertise or financial base to undertake the project.
Some of the advice is chronicled in affidavits filed in support of the legal case against Jones and his colleagues.
Jones, who had sweeping authority over Petrotrin, ignored the expert advice.
Then-Prime Minister Manning, who described Jones as his best friend, sidestepped the poor decision-making, huge cost overruns, and financial burdens placed on Petrotrin.
Now, there is another questionable and high-cost decision pertaining to the country’s prime State asset.
Experts are predicting a fate similar to that of WGTL and Niquan.
