One of the major issues of discussion at the recently concluded Trinidad and Tobago Energy Conference 2017, was the institutional capacity of key government regulatory agencies. Trinidad and Tobago is facing the prospect of further significant declines in gas production from 2019 onwards, unless final investment decisions are taken immediately to develop new gas fields, such as bpTT’s Angelin project. These major investment decisions by international oil and gas companies rely upon timely decision-making by the government of Trinidad and Tobago. This means that the ministries and agencies that inform overall governmental decision-making must be well staffed and functioning effectively for timely investment decisions to be taken.
There is a strong perception that over the years, the once strong reputation of Trinidad and Tobago’s governmental agencies, in particular, the Ministry of Energy and Energy Industries, has been gradually eroded. Other important regulatory agencies, such as the Environmental Management Authority and the Board of Inland Revenue have also faced their own challenges. There have been various attempts over many years to reform and strengthen the regulatory agencies which impact the oil and gas industry, but the reality is that little progress has been made to date.
There are many very well-qualified, experienced and dedicated professionals working within the governmental system, but the overall structures have not allowed these individuals to be as productive and effective as they could in different management systems. Over the last few years, many countries in Latin America have restructured their oil and gas regulatory authorities to create a well-resourced and effectively managed hydrocarbon agency, in place of previous models based around central government ministries and state-owned companies.
Agencies such as the Agencia Nacional de Hidrocarburos (ANH) in Colombia, the Empresa de Pesquisa Energética ( EPE) in Brazil and the Centro Nacional de Control de Energía (CENACE) in Mexico have been effective in encouraging significant new investment into upstream oil and gas production. They have been run along private sector lines, but with a clear national mandate to attract investment. They have typically put a big emphasis on delivering accurate and timely data to potential investors, especially around the geology of prospective basins, which has helped create significant interest.
Trinidad and Tobago desperately needs significant new investment into upstream gas and oil production to sustain our energy sector. We need well-resourced and wellmanaged regulators if we are to create the transparency and predictability so important to major international investors. Institutional reform and strengthening of our key regulatory agencies is vital for the long-term future of our industry. This urgent work cannot be postponed.