PETROTRIN president Khalid Hassanali maintained yesterday the State-owned oil company was experiencing a turnaround in its crude oil production.
He said this followed the completion of the results of seismic data, both on land and offshore.
The company, he said, was heading into a phase of growth and development which will result in a reassessment by international ratings agencies.
Hassanali was responding to Standard & Poor’s Financial Services’ report that Petrotrin’s long-term corporate credit rating has been downgraded. The American ratings agency said the company’s credit rating went from BBB to BBB- on Wednesday. The report said the company’s outlook was now “stable”.
According to the ratings agency, the downgrade was based on “Petrotrin’s weaker-than-expected operating performance that is exposing the company to higher operating costs and would cause tightening cash flow leverage metrics in the next 12-18 months”.
The report also said operational disruptions and several overdue turnarounds in its refinery affected the company’s operations during 2013.
“As of March 2014, the company’s production increased by 2.4 per cent to 71.713 thousand barrels per day (mboepd) from 70.01 mboepd in 2013. However, (Standard & Poor’s) expects faster increases in production by 2015 due to the company’s reactivation of 60 wells in the Southwest Soldado field,” the report stated.
S&P said as a Government-related entity, it was expected that Trinidad and Tobago would provide timely and sufficient extraordinary support to Petrotrin in the event of financial distress.
Petrotrin was rated Baa3 (Stable) by Moody’s Investor Services.
Hassanali responded yesterday, “Standard & Poor’s has decided to downgrade Petrotrin to BBB-, the lower investment grade level in their schedule. They have cited as the main reasons the adverse current and projected outlook on the refining and marketing business due to the unfavourable commercial environment and the consequent impact on our liquidity. As you are aware refiners in the Caribbean have been impacted by reduced margins following the continued shale oil and shale gas discoveries in North America who is now providing the market with cheaper refined products. As a result Petrotrin’s profits were reduced in fiscal 2012/2013.”