One of the most grueling stages of the Tour De France is the mountainous Col de Tourmalet leg. Even the most experienced cyclist can struggle to reach its summit, testing their tendons and mental tenacity against the Central Pyrenees’ sloping roads.
When Trinidad and Tobago attained Extractive Industries Transparency Initiative (EITI) Compliant Country status earlier this year, we successfully rode past our very own Col de Tourmalet.
To pass this stage, we had to endure four years of rigorous external checks and independently verified audits of our oil and gas revenue payments.
Two EITI Reports have been published to date. These reports are chock full with data on revenue payments made by the major oil and gas firms to Government, how much these companies spend on social and infrastructure projects, plus recommendations on how the relevant Ministries can improve energy revenue data collection and revenue management.
The key question now is how we can put this information to use. Based on where you sit, of course, your perspective on and answer to that question can vary.
Civil society, Government and extractive companies can use the data as a guide on everything from their calls for sustainable energy resource management, new energy policy or, for companies, internal project selection.
We can analyse one of our major state energy enterprises, Petrotrin, to highlight what the EITI data means for competing interests. In the case of Petrotrin, if we look at both the chart and the table below, it is clear the company has had a sizeable decline in revenue payments year-on-year.
This information is taken directly from the 2011 and 2012 EITI Reports and, as mentioned before, sends different signals to different audiences.
Imagine I am a high-ranking Government official. In preparation for the annual budget, I will see the decline and think of the revenue implications for the country given current oil price volatility.
What was the price of oil when these revenues were recorded? How will the rise or fall in petroleum production levy payments correlate to my Government’s projections for expenditure on the fuel subsidy?
If I am an executive manager at Petrotrin, I will see the decline and think of what strategies I can implement to get more local equity crude to my refinery or determine whether we must scale back on plans to spend X million dollars, instead of Y million dollars, on asset integrity work for the company’s aging infrastructure.
What if I am the leader of a civil society group, based in the southwestern peninsula, with a focus on environmental sustainability? I could look at these revenue payments and demand that Petrotrin provide more support to communities affected by the oil spill, or even increase compensation to fishermen.
What if I am the leader of a labour union? Will the company’s performance impact my union’s demands in the upcoming collective agreement negotiations? What strategies will I have to adopt to get a better package for my union’s membership?
In reviewing the data from the EITI Reports, the options and scenarios for all different stakeholders are far-ranging and can take up much more column space. Hopefully, this very basic analysis highlights the value of the EITI for the country and all stakeholders – from your average Joe to your average decision-maker.
The EITI, if used correctly, is a useful resource in our race to promote energy revenue transparency and sustainable management of our finite resources. And by becoming EITI-compliant, we have passed our Col de Tourmalet, but our Tour is not yet finished.
There are several legs ahead, and only when the EITI is embedded into our laws, policies and operating processes can we take our hands off of the handlebars for our victory lap.
Sherwin Long is the Head of the Trinidad and Tobago Extractive Industries Transparency Initiative Secretariat.