Over the past few months, there has been a lot of commentary in Trinidad and Tobago questioning whether or not the country’s energy industry has a future. The spectacular rise of the oil industry in Guyana and the exploration success in Suriname has shifted the centre of gravity for Caribbean hydrocarbons south-east, while the climate change and the urgent need to decarbonise the global economy has people worried if hydrocarbons have much of a future at all.
The oil, gas and petrochemical sectors have been the backbone of Trinidad and Tobago’s economy ever since the nation gained independence. The country’s success in the sector allowed it to become the most developed country in the Caribbean, with the highest levels of per capita income and significant government revenue.
This success was not guaranteed by the mere presence of hydrocarbons in the country’s subsurface geology. There are plenty of examples of countries around the world that have not managed to turn their hydrocarbon resources into aboveground revenue. This is especially the case with natural gas reserves, which many nations without existing industrial demand have found difficult to successfully monetise. Trinidad and Tobago certainly has a good story to tell, and over the years many people have been interested in understanding how the country achieved its success. But past success is no guarantee of future success, and the clear feeling among many people in the country is that the glory days are in the past.
While the immediate circumstances make this lack of confidence in the future understandable, they underestimate the significant potential that the country still holds. As BHP’s exploration success in the Atlantic waters east of Tobago clearly show, there are still significant resources to be found. As a deepwater gas development, the Calypso project is certainly going to be a challenging one to successfully execute, both technically and fi nancially. But Trinidad and Tobago has shown itself able to successfully develop projects in the past; we should not forget that the Atlantic LNG project was certainly a ground breaking project back in the 1990s.
While the energy transition clearly means that renewable energy sources will grow most rapidly, this does not mean that gas does not have a long-term future. Most scenarios predict that natural gas is going to remain as an important fuel for electricity generation for decades to come, as well as a feedstock for petrochemical production. In some markets, especially Europe, there is likely to be an increasing demand for greener petrochemicals and lower carbon liquefied natural gas (LNG). Trinidad and Tobago has an opportunity to green our petrochemicals, especially with the addition of hydrogen from renewable or low carbon sources, as well as lower carbon LNG through improved energy efficiency and potentially offsets (for example, through carbon capture and sequestration).
In addition to the potential of carbon capture and sequestration, enhanced oil recovery using carbon dioxide (CO2) also presents a significant opportunity to revitalise the traditional oil industry. There are still significant volumes of oil in existing reservoirs, and the potential for new finds in traditional areas should also not be discounted as the recent Touchstone onshore exploration success clearly indicates.
While there are clearly still opportunities to extend the life of hydrocarbon production in Trinidad and Tobago, the real strength that the country has, is not in its geology but rather in the ability of the people and the companies involved in the industry. Trinidad and Tobago has always put a lot of resources into human development, and there are large numbers of well-trained energy sector professionals and skilled workers both working in the country and in the industry around the world. There are also a large number of service companies with significant expertise. These individuals and companies will ensure that the industry has a future, even while the sector undergoes significant transformation.