Well-deserved and hearty congratulations are extended to Process Components Limited (Procom) and Massy Technologies Applied Imaging (Trinidad) Ltd. who each got a perfect score of 100 per cent in each Safe TO Work (STOW) element at their 2017 recertification audits. STOW is a certification programme for contractors’ health, safety and environmental (HSE) management systems (MS) which involves contractors implementing the locally developed STOW HSE requirements and undergoing an independent audit to verify compliance to the requirements.
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While the country continues to struggle to meet its renewable energy targets by 2021, the Government of Trinidad and Tobago has made a first step in the direction of diversifying its energy mix for electricity away from 100 per cent natural gas-fired power plants. Earlier in September, the Ministry of Energy and Energy Industries issued a request for the submission of expressions of interest (EOI) for a waste-to-energy (WtE) facility at the Beetham Landfill site.
One of the arguments used by proponents of fossil fuel subsidies in Trinidad and Tobago is that the gasoline or diesel that they put into their tanks is produced in the country and, therefore, belongs to them and should be provided to them at a low price. In reality, on average, more than half of the hydrocarbon molecules going into any gasoline or diesel tank will actually have been produced in another country and imported to Trinidad and Tobago to be refined at the Point-a-Pierre refinery. The hydrocarbon molecules going into your tank could be from Trinidad and Tobago, but they also could be from Russia, Gabon, Brazil or Colombia.
Shell’s activity in Trinidad and Tobago is set to accelerate over the next few years, with two rigs due to be simultaneously in operations for the first time in the recent history of the asset (which was brought into the Shell Trinidad & Tobago Limited portfolio through their purchase of BG Group). The recent acquisition by Shell Trinidad & Tobago Limited of Chevron’s interests in Trinidad and Tobago has allowed them to make investment decisions on new activity off Trinidad’s east coast without having to seek the agreement of a partner. This has been important in unlocking the new investment in upstream gas production.
Over 96 per cent of service companies reported that they were affected by late payments and that they had receivables in excess of 60 days, according to a survey of contractors and service companies conducted by the Energy Chamber of Trinidad and Tobago. In addition, 58 per cent of respondents said that the impact on their companies was very significant.
Currently, the local energy landscape is challenged as there exists a natural gas supply shortfall in the local energy sector, primarily as a result of depleting reservoirs (mature province); easy discoveries already found; little exploration contributing to the gas supply challenge; limited access to good quality and low cost seismic data and long negotiation period for gas contracts.
With the government already having announced its intention to remove the transport fuel subsidy, there is now a new focus on the cost of the electricity subsidy in Trinidad and Tobago. The cost of this subsidy has been largely ignored in the past as it was borne, not by the central government, but by The National Gas Company of Trinidad and Tobago Ltd. (NGC). However, with gas shortages plaguing the petrochemical and LNG sectors, and with NGC seeing its margins being squeezed by low commodity prices in the downstream and higher natural gas sales prices being demanded by the upstream, this issue has come to the fore.
Touchstone Exploration, the Toronto-listed oil and gas firm made its debut on London’s Alternative Investment Market (AIM) raising £1.45 million by placing 20 million new shares priced at £7.25 per share. In a company press release, President and Chief Executive Officer Paul Baay said access to London’s capital markets will be a boon to the firm’s future success.
Global methanol prices have almost doubled over the past year, with June 2017 prices at US$455 per tonne. At first sight, this might look like good news for Trinidad and Tobago, but this increase in prices has been driven in part by declines in Trinidad production. Methanol Holdings Trinidad Ltd. has been forced to mothball some of their Trinidad production due to continued shortfalls in natural gas supply and their inability to negotiate new gas purchase contracts from The National Gas Company of Trinidad and Tobago Limited.
In December 2015, the landmark Paris climate agreement was agreed to by 195 nations around the world. The agreement signals the global resolve to reduce CO2 emissions and to curb the rate of global warming. To date, out of 197 countries that have signed onto the Paris agreement, 153 (78%) have already ratified the agreement and put it into force in their own country, committing themselves to a self-determined plan to reduce CO2 emissions. Trinidad and Tobago is among the minority (22%) of countries which have not ratified the agreement.
The United States Geological Survey ranks the Guyana- Suriname Basin as the second most prospective, underexplored offshore oil basin with an estimated 13.6 billion barrels of oil and 32 trillion cubic feet of natural gas yet to be discovered. Apart from the Exxon successes in Guyana, interest has once again turned to Suriname.
Chairman of Petrotrin, Professor Andrew Jupiter, indicated that the state oil company has pre-qualified 29 firms for enhanced oil recovery (EOR). Speaking at the Enhancing Oil and Gas Recovery symposium hosted by the Energy Chamber and the University of Trinidad and Tobago, Professor Jupiter revealed the intention to boost oil production by Petrotrin in a number of areas both onshore and offshore.
A number of smaller retail gas stations in Trinidad and Tobago have been forced out of business in recent years. Gas station owners have been especially hard hit by increases in taxation that have significantly increased their costs while, under the law, they are operating on fixed margins. The tax changes that have led to this situation have been the increases of Green Fund and Business Levy which are paid based on gross revenue not profit.
One of the key factors affecting Petrotrin is the margins under which they operate, this according to Petrotrin head, Fitzroy Harewood in May at an energy luncheon held by the Energy Chamber. Harewood provided a frank look at the company’s future given the “lower for longer” price environment. He said that the only way for the model to work is keep the cost of the raw materials down, and maximise the cost of finished products. Fundamental to ensuring the margins at the refinery health he said, is increasing local oil production. Whatever the lifting cost is to bring that crude, represents the cost of production. When we buy crude, we are exposed to market forces.
The average gas selling prices of two major upstream producers in Trinidad & Tobago declined by approximately 35% between 2015 and 2016, with BP reporting average prices of US$1.72 in 2016 and EOG Resources reporting average prices of US$1.88 per mmscf. These figures are taken from the company’s Annual Reports and SEC filings; in the case of BP, the figure quoted is for their South American region, but as Trinidad & Tobago, is their only gas producing asset in the region, the price can be assumed to be the Trinidad & Tobago price.