Suzanne Shep­pard

Fi­nan­cial­ly trou­bled state en­er­gy com­pa­ny Petrotrin suf­fered an­oth­er blow to its for­tunes this week af­ter it was down­grad­ed by Stan­dard & Poor's Rat­ings Ser­vices (S&P) from BB+ (Sta­ble) to BB (Weak).

This comes six months af­ter an­oth­er in­ter­na­tion­al rat­ings agency, Moody's In­vestors Ser­vice, down­grad­ed the com­pa­ny to Ba1 from Baa3 and changed its out­look to neg­a­tive from sta­ble and just weeks af­ter Petrotrin's new chair­man warned that the en­er­gy com­pa­ny is in dan­ger of go­ing out of busi­ness.

The S&P down­grade took place in Oc­to­ber but Petrotrin re­ceived the cred­it rat­ing re­port from the in­ter­na­tion­al agency on Tues­day. S&P said it re­vised Petrotrin cred­it rat­ing in keep with ac­tion tak­en against en­er­gy pro­duc­ing coun­tries and ma­jor en­er­gy com­pa­nies around the world. The com­pa­ny was among 16 in the Amer­i­c­as to be down­grad­ed.

In a me­dia re­lease yes­ter­day, Petrotrin ac­knowl­edged the down­grade but at­tempt­ed to put a pos­i­tive spin on the mat­ter, say­ing it was com­mit­ted to build­ing a sus­tain­able busi­ness in the face of con­tin­ued low oil prices and oth­er ex­ter­nal fac­tors which "con­tributed to a less than fa­vor­able cli­mate for en­er­gy op­er­a­tors around the world."

"With the fall in oil prices over the past year, Petrotrin has been re­vis­ing its strate­gies and low­er­ing cap­i­tal and op­er­at­ing ex­pens­es in all ar­eas of its op­er­a­tions. This re­mained a key pri­or­i­ty for the or­ga­ni­za­tion at the start of the new fi­nan­cial year in 2015 Oc­to­ber as fur­ther mea­sures were pro­posed to man­age cost and im­prove prof­itabil­i­ty. Some of these mea­sures will be­come ev­i­dent in the com­ing weeks and months," the com­pa­ny said.

The state­ment went on: "Petrotrin con­tin­ues its re­newed fo­cus on the crit­i­cal ar­eas of cost man­age­ment and im­prov­ing the ef­fi­cien­cy of its op­er­a­tions. At this time, all op­tions are be­ing re­viewed with key stake­hold­ers in a move to iden­ti­fy and im­ple­ment pos­i­tive so­lu­tions in the best in­ter­est of all.

"As a key con­trib­u­tor to the na­tion­al econ­o­my of Trinidad and To­ba­go, Petrotrin wish­es to as­sure the na­tion­al pub­lic that it re­mains com­mit­ted to iden­ti­fy­ing and ex­plor­ing all avail­able op­por­tu­ni­ties to en­sure its long term vi­a­bil­i­ty."

In an im­me­di­ate re­ac­tion, the En­er­gy Cham­ber said the Petrotrin down­grade was not sur­pris­ing called for ur­gent ac­tion. The cham­ber said the com­pa­ny must con­tin­ue to cut costs and im­prove ef­fi­cien­cy

The dire state of the en­er­gy com­pa­ny was high­light­ed by its new chair­man An­drew Jupiter short­ly af­ter he took up the ap­point­ment last month when he warned that un­less the trend of spend­ing much more than the com­pa­ny earns is quick­ly re­versed, it would soon go out of busi­ness.He said while the com­pa­ny has the po­ten­tial to be a sus­tain­able busi­ness, achiev­ing that goal re­quires "dras­tic and ur­gent change."

Warn­ing that it could not be "busi­ness as usu­al," Jupiter said Petrotrin is "in a per­ilous state and must take steps to ad­dress its cur­rent chal­lenges."

In ad­di­tion to be­ing se­vere­ly af­fect­ed by de­clin­ing en­er­gy prices, the com­pa­ny is strug­gling with high and in­creas­ing debt, low pro­duc­tiv­i­ty lev­els and es­ca­lat­ing man­pow­er costs. Its to­tal debt cur­rent­ly stands at $13.28 bil­lion and the com­pa­ny is sad­dled with a US$850 mil­lion bond which is payable in 2019.

An­oth­er state en­er­gy com­pa­ny is al­so feel­ing the ef­fects of falling prices. The Na­tion­al Gas Com­pa­ny (NGC) and its sub­sidiaries has frozen salaries and ben­e­fits to staff for the rest of 2015 and 2016 and is cut­ting bonus­es. In a memo to em­ploy­ees last week, NGC said low­er en­er­gy prices had re­sult­ed in "sig­nif­i­cant­ly low­er rev­enues and earn­ings; much low­er than have been ex­pe­ri­enced over the past five years."

On in­ter­na­tion­al mar­kets yes­ter­day, West Texas In­ter­me­di­ate (WTI), the crude which trades with­in the range of the light sweer crudes pro­duced in T&T, closed at US$43.04 a bar­rel, low­er than the US$45 on which the na­tion­al bud­get is pegged.