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Energy Chamber Editorial
The government and the energy industry in Trinidad and Tobago does not have the luxury of time if it aims to ensure a sustainable future. We need decisions in the immediate term if we are to deliver a long-term sustainable future for the energy sector.
Over the past decade the Energy Chamber’s flagship Safe to Work (STOW) programme has helped many smaller contractors and service companies implement robust health, safety and environmental management systems and to meet the requirements of major customer companies in the energy sector. There are now almost 500 companies fully STOW certified. Despite this success, the energy industry must continue to work to make sure every single contractor or service company carrying-out high risk work is fully compliant and meets the STOW requirements.
Urgent government action is required to halt the current significant decline in activity in the Trinidad and Tobago oil sector and the knock-on impact that this is having on both crude oil production and the energy service industry, the major generator of employment in the sector. Since September 2015, the government has been promising a consultation process to discuss energy sector taxation and other issues facing the industry, but to date, no such consultation has taken place and there is no clear signal being provided of when or how this will occur.
Trinidad and Tobago needs direct foreign investment for its economic and social development. The economy of Trinidad and Tobago is – and will remain for the foreseeable future – an oil, gas and petrochemical-based economy. This means that we need very high levels of capital investment into our economy, each and every year. Oil and gas reservoirs have a natural decline rate and in order to simply maintain a national plateau of production we require billions of US dollars of investment every year. Given the current shortfalls in gas production, there is a particular need to attract investment into upstream gas production.
The current low commodity price environment has focused national attention on the diversification of the economy. In a small economy, diversification is only going to happen if we have competitive, export-driven companies who are able to sell goods and services beyond our borders. If we are going to be globally competitive, we urgently need to reverse the current trend in declining productivity.
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.
Investment levels in the Trinidad & Tobago upstream sector have remained at relatively high levels despite cuts, internationally, in capital expenditure due to low commodity prices. In December 2015, the Minister of Energy and Energy Industries, Nicole Olivierre, reported that investment was expected to be approximately US$3.0 billion in 2015 and in 2016.
Despite oil prices around the US$ 30 mark and downward pressure on the price of Trinidad & Tobago’s major export, liquefied natural gas (LNG), participation in what has become the biggest annual energy conference in the Caribbean region remains high.
One of the long-standing and key strategic objectives of the Energy Chamber has been to maximise local content in the Trinidad and Tobago energy sector.
Vincent Pereira outlines his vision for local content at the Energy Chamber's 3rd annual Local Content Forum
Budget recommendations: increase the SPT base, incentivise investment in small gas fields and re-examine PSCs.
Chamber makes Budget recommendations
Reforms imperative to ensure sector’s sustainability
We cannot control global gas and commodity prices, but we can control how efficiently our industry operates.
