The Energy Chamber of Trinidad and Tobago has expressed support for the recently released Finance Bill 2026, which introduces important measures to incentivize the upstream gas sector. Notably, the Bill proposes a reduced royalty rate of 8% on natural gas extracted from certified marginal marine gas fields. This is a decrease from the general royalty rate of 12.5% which is currently applied under the existing Petroleum Regulations.
Under the proposed legislation, a marginal marine gas field is defined as an offshore shallow-water field with recoverable gas resources of 300 billion cubic feet or less. To qualify, the field must also have an internal rate of return below 15 % as a standalone project and commence production after January 1, 2026. Furthermore, the field must be officially certified by the Minister of Energy and Energy Industries.
Marginal fields, often referred to as small pools, are historically challenging to develop due to complex geology and less favourable economics when compared to larger discoveries. However, these smaller pools are frequently located near existing infrastructure. This proximity allows for cost-effective tiebacks into the current natural gas system, potentially transforming previously unviable reserves into economically productive assets.
By lowering the tax burden, the new legislation directly improves project economics and increases the likelihood of these developments reaching a final investment decision. The Energy Chamber views this reduction as an important and welcomed step forward in stimulating investment within the upstream gas sector.
The Energy Chamber also encourages the Ministry of Finance to continuously consider these types of fiscal incentives. Bringing more projects onstream means increased opportunities for contractors, which in turn increases levels of employment across the energy sector.