Looming shutdown, layoffs prove Petrojam crisis – energy minister
Newly installed Energy Minister Fayval Williams has defended the Jamaican Government’s decision to explore the possibility of shutting down Petrojam’s refinery portfolio and operating as an import terminal if the ageing state-owned entity fails to upgrade its infrastructure.
Her declaration came hours after Peter Bunting, the opposition spokesman on industry, commerce and competitiveness, revealed that the 2018 Muse, Stancil & Company US$34-million valuation of Petrojam was based on a paradigm shift in its functions.
Bunting added that the assesment was predicated on the scandal-hit refinery shuttering by year end and that redundancy payments, as well as other details, were included in the report.
But even as Williams confirmed Bunting’s revelations, she stressed that those were “assumptions” made by Muse, Stancil independent of the Government.
According to the report, a copy of which The Gleaner received yesterday afternoon, Petrojam’s staff complement would be reduced to 30 per cent of its current figure. The refinery’s website puts its core workforce at 211.
“These are assumptions, if there are no investments in Petrojam,” Williams told The Gleaner last night, emphasising that the entity was on the brink of becoming obsolete, with recommendations for an overhaul going back more than a decade.
Williams said that the US$34-million Petrojam valuation, as per the 2018 report, would have been indicative of the current dilemma and was based on an absence of capital injection.
“In this case, the refinery would be shut down as of January 1, 2020, and converted to an import terminal to supply Jamaica’s oil products demand,” a section of the report read.
Williams said the looming crisis was a compelling case for the forcible reclamation of Caracas' 49 per cent stake in Petrojam, held through PDV Caribe, a subsidiary of Venezuela’s state oil company PDVSA. The Jamaican Government owns the other 51 per cent.
“If we go forward without any major investment in Petrojam, this is what we will have,” the energy minister said last night.
On Tuesday, the House of Representatives passed a bill that would empower the Government to acquire Venezuela’s shares in the entity. The legislation will next go to the Senate for debate.
But even with the valuation in hand, Williams appears to be in no hurry to make any declaration on Petrojam’s future once the Government has acquired full ownership. She said she would await the report from the Christopher Zacca Committee, due in May, that will make recommendations to the Government to determine the strategic direction of the oil refinery.