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Derelict wrecks in Gulf linked to illegal diesel sale

By Richardson Dhalai Wednesday, December 18 2013

Intelligence gathered suggest that derelict wrecks littering the Gulf of Paria may have been used in the illegal sale of diesel, according to Energy Minister, Senator Kevin Ramnarine.

He revealed that a meeting with the Ministry of Environment and Water Resources was scheduled for today, to discuss methods to deal with the derelict vessels.

Ramnarine was speaking to reporters following the official launch of the $18 million drilling academy at the NESC Usine Ste Madeleine campus, Ste Madeleine on Monday night. Asked about the illegal trade in diesel, Ramnarine noted that the combined total of three raids on the illegal diesel trade was worth approximately $100 million, and once again suggested the monies may be used to fund criminal activities, such as the sale of illegal guns and drugs.

“We have had three raids in the last five months. In June, there was a raid, and there were two raids in Sea Lots in November, so I asked the Ministry and NP what is the value of those three businesses based on the volume of the tanks that were seized, and we made an assumption of two shipments per week from each one of those businesses.

The figure, of those three businesses are worth collectively around $100 million TT in terms of value of diesel being illegally exported,” Ramnarine said.

“Now that is three that we are aware of, our intelligence are telling us that there are more,” he said, adding the Ministry was interested in the procurement of an instrument which could be used to scan the coastline to detect the mechanisms used in the illegal export of diesel, which may be underwater and cited the kilometre long hose which had been used to link Sea Lots to the Caricom jetty.

“There is a nexus between that illegal business in diesel, and crime and drugs in Trinidad and Tobago,” he said.

And regarding the derelict vessels in the Gulf of Paria, he said “our information is some of those wrecks are being used by persons involved in the illegal export of diesel, and in some of those wrecks, are tanks.

“So apart from a safety and environmental hazard, it also provides, it also facilitates illegal activity so there’s a meeting at the Ministry of the Environment on this morning, how we treat with all those wrecks,” he said.

Ramnarine also complimented the Tertiary Education and Skills Education, (TEST), Ministry for the establishment of the nation’s first drilling academy. He noted that exploration activities in both the offshore and onshore acreage was expected for the rest of the decade.

“We are about to enter into a period of heightened activity here already,” he said, adding Petrotrin president Khalid Hassanali had informed them that the company was not able to get drillers, saying they were either entering the private sector, or going abroad.

“We are heading into a period where, at the end of the year, we have an eight-fold increase in the amount of rigs that are working in our waters, and based on our projections at the Ministry, this level of activity will continue for the rest of the decade,” Ramnarine said.

“So Trinidad and Tobago’s upstream sector will be very much buoyant and alive for at least the next ten years based on the production sharing contracts that we have signed, which are contractual commitments to work programmes,” he said.

Ramnarine said the seven production sharing contracts were valued at US$1.9 billion.

Meanwhile, asked whether United States shale gas would negatively impact on TTs local gas sector, Ramnarine said the threat to the local petroleum industry and Petrotrin in particular, was shale oil and not shale gas.

Ramnarine explained that the US oil market has presently experienced a “glut” in oil supplies, due to the finds of shale oil, and which had created a disconnect between the US oil price which was pegged at West Texas crude and the global oil price which was pegged as the Brent oil.

‘By law the United States cannot export crude oil and that’s for strategic reasons so therefore they have a glut of oil in the United States and the price of oil is becoming more and more depressed in the US, and there’s a disconnect between the US price, the West Texas price and the Brent price which is the global price as a consequence, America is producing low price petroleum products, gasoline, diesel, jet fuel,’ Ramnarine said, and pointed out that had “impacted negatively on our refinery.”

“Our refinery operates on what is called the refinery margin which is barrel of crude goes into the refinery and it is refined, and the refined products must of course be of more value than the input which is the crude oil. That margin has now fallen.’ he said.

“We really have to have a serious look again at Petrotrin because the company is really two halves- there’s the upstream side which is making money- that’s the production of crude oil, and the sale of crude oil but the challenge resides in the refinery where the margin has collapsed,’ he added.

“So that’s the challenge, we met with the Board last week and we are agin meeting with the Board in the first week of 2014 to look at how could prepare for this shale oil and the threat is really in shale oil,’ Ramnarine said.

Meanwhile, Karim said the drilling academy, which featured a rig imported from Louisiana, USA was sited at a facility once owned by the former Usine Ste Madeleine sugar factory.

He also pointed out that the refurbishment cost to the site was approximately $3.2 million while the equipment and tools cost approximately $2.5 million dollars.

Ramnarine also declined comment on the resignation of the National Petroleum chief executive officer, [CEO], saying he had not been formally notified by the NP Board about the resignation of the CEO.

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