The Government of Trinidad & Tobago needs to urgently start the proposed consultation process with the oil, gas and petrochemical industry. The emphasis of the consultation process must be on how upstream investment dollars are going to be attracted to Trinidad & Tobago in the context of huge cuts in global capital expenditure in the current low commodity price environment. Without continued capital investments our oil and gas production will continue to decline, creating a very uncertain future for our refining, LNG and petrochemical industries.
The gas master plan completed in 2015 will have given the government significant amounts of data on the issues facing the gas sector. It will also have given the government a wide range of recommendations on the policy changes that are necessary to sustain our industry. The full findings of that gas master planning process have not been fully shared with the industry, though some of the key findings and recommendations were outlined in a single presentation to key players in the industry in June 2015. Over the past few months the government has made a strong commitment on a number of occasions to consult with the industry on the issues facing the sector, as we move from recommendations contained in the consultant’s report to the actual policy measures.
The Energy Chamber welcomes the proposed consultations. However, the Energy Chamber would also like to recommend that the government immediately enter into a dialogue with the industry about how those consultations will actually take place, the format, the information that is required and most importantly the intended outcomes. If it is to succeed, the consultation process needs to be well structured with clear mechanisms for exchanging information and ideas, including mechanisms for dealing with commercially confidential items.
In his budget speech, the Honourable Minister of Finance mentioned that the proposed Trinidad & Tobago consultation process may be modelled on the United Kingdom consultations of 2014. The Energy Chamber thinks that the UK consultation process could be a good starting point. The Energy Chamber notes, however, that the UK process started with a published report authored by Sir Ian Wood. The Wood Review advocated an overall switch in the guiding economic philosophy for the UK continental shelf, moving from maximizing government revenue to maximizing overall recovery of hydrocarbons. The UK government then asked companies and other stakeholders to present evidence to support the proposed changes in a structured consultation process over a three-month period, culminating in the government adopting a new overall policy known as Maximising Economic Recovery or UK MER and specific regulatory and administrative measures to support this overall policy.
For the Trinidad & Tobago consultation process to yield benefits we need a similar well-structured and inclusive consultation process. The consultation process must extend beyond a single big meeting with stakeholders. The energy industry urgently requires clarity on how the consultation process will take place, when it will begin and the intended outcomes.