Mar­i­ano Browne

Trinidad and To­ba­go has been in the oil busi­ness for ap­prox­i­mate­ly 125 years. It has been the home of sev­er­al small re­finer­ies (San­ta Flo­ra, La Brea, and Point Fortin), which were all closed over time as they be­came non-vi­able due to age­ing tech­nol­o­gy or sup­ply and cost chal­lenges. The ear­ly re­finer­ies processed lo­cal crude, whilst the Shell re­fin­ery in Point Fortin processed a mix­ture of lo­cal crude and im­port­ed crude. The largest re­fin­ery was ac­quired by Tex­a­co in 1956 and up­grad­ed to process main­ly im­port­ed Mid­dle East­ern crude, blend­ed with lo­cal crude for ex­port to the Unit­ed States East Coast. Its rat­ed ca­pac­i­ty was 360,000 bar­rels of oil a day (BOPD).

Af­ter In­de­pen­dence, as en­er­gy com­pa­nies ex­it­ed the mar­ket at var­i­ous times, the GORTT ac­quired their as­sets and, as a re­sult, formed sep­a­rate state en­ter­pris­es: Trin­topec, Trin­toc, and Trin­mar Ltd. Petrotrin was es­tab­lished in 1993 by the merg­er of Trin­topec and Trin­toc. Trin­mar Ltd was merged in­to Petrotrin in 2000. The Point Fortin re­fin­ery was closed in 1993, leav­ing on­ly the Point A Pierre re­fin­ery. Some in­ef­fi­cient plants/units at Point-a-Pierre were closed, re­duc­ing re­fin­ery ca­pac­i­ty to 170,000 bopd.

It is im­por­tant to note that, con­trary to pop­u­lar opin­ion, the re­fin­ery was nev­er able to suc­cess­ful­ly re­fine the “sweet” crude pro­duced on T&T’s east coast, as the blend­ing re­quired was ei­ther in­com­pat­i­ble with the ex­ist­ing plant con­fig­u­ra­tion or too ex­pen­sive. As a re­sult, the East Coast “sweet crude” has al­ways been ex­port­ed. Fur­ther, the re­fin­ery’s fu­el out­put was large­ly ex­port­ed, with lo­cal mar­ket de­mand ac­count­ing for on­ly 15% of to­tal out­put, or 25,000 bopd. There­fore, to be suc­cess­ful, a re­fin­ery op­er­at­ing in T&T needs to suc­cess­ful­ly ex­port the ma­jor­i­ty of its out­put.

Mar­ket con­di­tions nev­er re­main sta­ble, and at the same time, in­ter­na­tion­al reg­u­la­tions were chang­ing from 2000 on­wards, re­quir­ing fu­el spec­i­fi­ca­tions to meet emis­sion stan­dards in keep­ing with the de­mand for “clean air.” As a re­sult, since the Petrotrin re­fin­ery’s con­fig­u­ra­tion did not pro­duce fu­el of the re­quired qual­i­ty, it un­der­took a se­ries of projects to meet these new, high­er stan­dards for im­proved fu­el qual­i­ty by re­duc­ing sul­phur con­tent and in­creas­ing oc­tane and cetane rat­ings.

Un­for­tu­nate­ly, few of these projects proved suc­cess­ful. They were al­so fi­nanced by bor­row­ing. This co­in­cid­ed with a pe­ri­od of low oil prices, which led to de­clin­ing mar­gins as the low­er-qual­i­ty out­put could not com­mand the mar­gins re­quired to sus­tain the re­fin­ery’s op­er­a­tions, and de­pressed Petrotrin’s fi­nan­cial re­sults, re­sult­ing in op­er­at­ing loss­es. Be­cause of this, Petrotin was re­struc­tured in 2018. The aim of the re­struc­tur­ing was to close the re­fin­ery and pre­vent the re­fin­ery’s loss­es from af­fect­ing the rest of the busi­ness (pro­duc­tion and dis­tri­b­u­tion).

Since 2018, the cor­po­rate struc­ture has con­sist­ed of a “par­ent” or hold­ing com­pa­ny, Trinidad Pe­tro­le­um Hold­ings Lim­it­ed, which holds the debt and owns the sub­sidiaries. Specif­i­cal­ly, the sub­sidiaries are: Her­itage Pe­tro­le­um Com­pa­ny Lim­it­ed, which owns the oil re­serves and ex­plores, pro­duces, and sells crude oil; Paria Fu­el Trad­ing, which is re­spon­si­ble for im­port­ing and dis­trib­ut­ing re­fined fu­el prod­ucts; and Guaracara Re­fin­ing Com­pa­ny Lim­it­ed, which owns the re­fin­ery and re­lat­ed land as­sets. This struc­ture de­lin­eates each com­pa­ny’s role with­in the group.

De­spite sev­er­al sales at­tempts, the re­fin­ery re­mains idle and dis­tressed, re­quir­ing cost­ly and com­plex prepa­ra­tions be­fore any restart. This chal­lenge can­not be avoid­ed, even with a state joint ven­ture. Ad­di­tion­al­ly, align­ing the plant with in­ter­na­tion­al fu­el stan­dards is es­sen­tial. Al­though stand-alone re­finer­ies ex­ist, in­dus­try trends favour in­te­grat­ed com­plex­es that stream­line raw ma­te­r­i­al sup­ply.

The costs of es­tab­lish­ing an oil re­fin­ery vary wide­ly de­pend­ing on scale, com­plex­i­ty, lo­ca­tion, feed­stock, prod­uct slate, reg­u­la­to­ry en­vi­ron­ment, and whether you build a green­field or brown­field plant or up­grade an ex­ist­ing plant. While a new re­fin­ery costs bil­lions, so does an up­grade. Which mar­ket will this re­fin­ery serve, and what is the com­pe­ti­tion like? More im­por­tant­ly, where will the feed­stock come from, Venezuela, Guyana or else­where? This is crit­i­cal, as no re­fin­ery can op­er­ate with­out a raw ma­te­r­i­al source.

Glob­al de­mand for crude oil is rough­ly 100 mil­lion bar­rels a day(mb/d) and is ex­pect­ed to peak at 125 mil­lion by 2050. In re­la­tion to this de­mand, as of 2024–2025, there are ap­prox­i­mate­ly 700-825 op­er­a­tional oil re­finer­ies world­wide (Sta­tista). Those in­ter­est­ed in de­tailed da­ta can re­fer to the Oil & Gas Jour­nal, which pub­lish­es an an­nu­al world­wide list of re­finer­ies with a coun­try-by-coun­try tab­u­la­tion. Con­tin­u­ing in­to ear­ly 2026, glob­al oil re­fin­ery ca­pac­i­ty stands at ap­prox­i­mate­ly 103.66 mb/d, while to­tal re­fin­ery through­put reach­es about 86.89 mb/d.

The sec­tor is ex­pe­ri­enc­ing mod­er­ate growth, with ca­pac­i­ty, par­tic­u­lar­ly in Asia-Pa­cif­ic, Africa, and the Mid­dle East, ex­pect­ed to rise to meet grow­ing de­mand. Fur­ther­more, the in­dus­try is ex­pe­ri­enc­ing ca­pac­i­ty growth, with an ad­di­tion­al 181 re­finer­ies planned or un­der con­struc­tion be­tween 2024 and 2030, dri­ven large­ly by eco­nom­ic ex­pan­sion in Africa, Asia, and the Mid­dle East.

By re­gion, from 2024 to 2030, Africa is ex­pect­ed to add the most an­nounced and planned re­finer­ies, with 70, fol­lowed by Asia and the Mid­dle East, with 46 and 30, re­spec­tive­ly. These pro­posed re­finer­ies are ex­pect­ed to con­tribute 20.75 mb/d of crude dis­til­la­tion unit (CDU) ca­pac­i­ty world­wide dur­ing this pe­ri­od. To com­pete in a well-served US mar­ket or in Latin Amer­i­ca, any plant must of­fer an ef­fi­cient prod­uct mix and a sta­ble, long-term sup­ply source.

Mar­i­ano Browne is the chief ex­ec­u­tive of­fi­cer of the UWI Arthur Lok Jack Glob­al School of Busi­ness.