1. Fast-track bid rounds and the approval processes. 

Acreage needs to be awarded to competent operator companies for new exploration to take place.  Improving regulatory approval processes will reduce the time between the award of new acreage and first gas production.  This will significantly improve project economics and make new gas available faster.  A one-year reduction in the time taken to first gas has been calculated to create US$ 120 million in additional net present value for a typical Trinidad & Tobago medium-sized offshore gas field. [1]

2. Reform upstream tax system to incentivise investment

The current structure of upstream royalties and taxation does not encourage companies to reinvestment in exploration or the development of new fields. The fiscal regime, inclusive of the VAT system, needs to be reformed to unlock new investment.[2]

3. Invest in reducing the carbon intensity of operations and products

Cross border adjustment mechanisms (CBAM) for carbon taxes pose a threat to exports of LNG, petrochemicals and iron and steel from Trinidad & Tobago, especially to the European Union.  If Trinidad & Tobago commodity exports are to be able to sell to higher price premium markets the carbon intensity of production must be able to compete with other jurisdictions.  This will require the reduction of CO2 emissions from operations, reducing methane emissions and flaring, accessing offsets, and the introduction of low carbon molecules into the product mix (including green[3] and blue[4] hydrogen).

4. Divert gas from domestic electricity generation through energy efficiency and renewables

Gas for electricity generation is sold at prices far below the market rates for petrochemicals or export markets through LNG, which acts as a disincentive for upstream companies to invest in gas production.  Reducing gas going to electricity, through both increased renewable generation and improved energy efficiency (including upgrades towards high efficiency electricity generation and higher reliability in IPP and distribution sectors) will make more gas available for these foreign exchange earning sectors and will improve the profitability of upstream gas developments.[5]  Green hydrogen can also supplement natural gas as a feedstock. 

5. Encourage innovative approaches to small field development

As Trinidad & Tobago has matured as a gas province, new fields are often smaller and more difficult to develop.  Working with the Ministry of Energy, operator companies need to find new ways of bringing this gas to market making the best use of existing infrastructure.

6. Secure cross and across border supplies

There are significant gas resources in neighbouring territories, especially Venezuela but also potentially in Barbados and Grenada (in the longer-term).  In addition to significant untapped offshore gas fields, more natural gas is flared on the North Monagas oilfields in eastern Venezuela alone than the current shortfall in Trinidad production.  Securing these resources for export to Trinidad is politically challenging but has huge potential economic benefits and, in the case of the flared gas in particular, significant climate change benefits as well.


[1] Kenesjay Systems Ltd “Project Fast-track” submission to T&T Energy Chamber, November 2019. A reduction in the time taken from bid round to first gas from the current average 5 years to 4 years would represent an increase in the NPV (8%) of a typical gas field in T&T from US$815 million to US$ 934 million.

[2] Energy Chamber’s Fiscal Reform Task Force “Final Report” delivered to Government of Trinidad & Tobago, August 2021.

[3] Green hydrogen produced from the electrolysis of water or plasmification of waste.

[4]  Blue hydrogen produced from natural gas with C02 captured and sequestered (carbon capture and sequestration).

[5] “Draft Energy Conservation and Energy Efficiency Policy Action Plan 2020 to 2024”, submitted to Minister of Public Utilities, September 2019.

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