Trinity Exploration Q3 2022 operational update

19 Oct 2022

Trinity Exploration & Production provided an update on operations for the three-month period ended 30 September 2022.

1. The Company maintained robust production in the Period, leading to a 25% increase in operating cash flow, before corporate taxes and pre-hedging.
2. The first two wells of the six-well, fully-funded onshore drilling campaign were safely drilled, completed and brought into production during the Period. These wells commenced production at an initial aggregate rate of approximately 113 bopd. The third well in the programme has subsequently been drilled successfully and is in the process of being completed, with production anticipated to commence within the next two weeks.
3. Extended supply chain lead times for specialist drilling tools will result in a delay to the Company’s planned horizontal well, which is now expected to be drilled in Q2 2023.
4. The Company has taken the decision to delay the fourth conventional well in the programme, which was scheduled to be drilled immediately in advance of the horizontal well, to create operational synergies with the rig operations across these two wells.
5. The Company is actively looking to drill the planned deep well, or additional conventional wells, in advance of the horizontal well, but any decision will be subject to matters outside of the Company’s control including regulatory approvals and supply chain constraints.
6. The Company’s production guidance for 2022 remains unchanged at 2,900-3,100 bopd.
7. The Company’s successful drilling campaign, along with its programme of workovers and recompletions, is forecast to lead to a material increase in operating cash flow for 2023, for which no hedging instruments are in place and the Company will see the benefit of the recent reforms to Supplemental Petroleum Tax (‘SPT’).
8. As announced on 18 October, the Company’s share buyback programme was successfully completed on 17 October, with 672,000 Ordinary Shares repurchased for a total consideration of approximately US$1m.
9. The Board will consider a further share buyback programme.

Jeremy Bridglalsingh, Chief Executive Officer of Trinity, commented:

‘A key element of delivering Trinity’s strategy is maintaining, and now increasing, our base production, with results from the first three wells in our drilling campaign being in line with our expectations. The difficulties with the global supply chain for our horizontal well is frustrating, but notwithstanding these issues, we are pleased that we will begin to see the impact of the current drilling campaign by the end of October 2022, and a meaningful step-change in production is expected in 2023 when the horizontal and deep wells are expected to be on production.

I welcomed the fiscal reforms announced by the Government of Trinidad and Tobago, which will reduce the amount of tax we will pay from next year. The Company will continue to champion further tax and regulatory reform to make investment in Trinidad competitive in an international context.

Trinity has a strong hopper of exciting opportunities, which include further drilling in our core onshore areas, the East Coast Galeota licence and participation in the ongoing onshore licence round.

I am pleased that we have built a resilient business and we are now targeting significant opportunities in our portfolio that have the potential to deliver material economic returns to the Company and its shareholders.’

Q3 2022 Operational Highlights

• Safely progressing the fully-funded drilling campaign within the WD-5/6 and Forest Reserve onshore blocks:
• The first two wells (PS 612 and PS 613) successfully encountered target reservoir sections as prognosed, confirming our pre -drill expectations and were brought into production during the Period. Initial aggregate production from these two wells was approximately 113 bopd, within the expected range.
• The third well has subsequently been drilled successfully and is currently on production test.

Stable production:

• Q3 2022 production sold averaged 2,990 bopd (Q2 2022: 3,019 bopd; Q3 2021: 2,923 bopd).
• Year to date 2022 (Q1-Q3) average production volumes sold of 2,979 bopd, broadly flat year-on-year (Q1-Q3 2021: 2,995 bopd).
• Five recompletions (Q2 2022: 9) and 32 workovers (Q2 2022: 31) were completed during the period, with swabbing continuing across the Onshore and West Coast assets.

Ongoing benefits from onshore automation:

• Production volatility has been reduced and in WD 5/6 production volumes from automated wells have increased marginally rather than exhibiting the usual anticipated decline rates.
• Workovers in the automated wells have been reduced by 10%.
• Net average production guidance for 2022 remains 2,900-3,100 bopd (2021: 3,006 bopd).

Q2 2022 Financial Highlights

• Q2 2022 average realisation of US$84.3/bbl (Q2 2022: US$96.8/bbl; Q3 2021: US$ 62.6 /bbl).
• Operating cash flow pre-tax and pre-hedging of US$8.6m (unaudited), an increase of 25% compared to the previous quarter (Q2 2022: US$6.9m).
• Cash balance of US$16.5m (unaudited) as at 30 September 2022 (US$15.0m as at 30 June 2022), reflecting the combination of strong operating cash generation, the impact of which has been reduced due to hedging related payments and increased capex; primarily the drilling campaign, and receipt of VAT refunds during the Period.
• The Company commenced a US$1m share buyback programme which was successfully completed on 17 October, with 672,000 Ordinary Shares repurchased.
• Average operating break-even for Q3 2022 was US$32.2/bbl (unaudited) (Q2 2022: US$31.3/bbl; Q3 2021: US$27.8/bbl).

Fiscal Reforms

The Government of Trinidad and Tobago’s 2023 Budget Statement announced proposed reforms to the SPT . The changes for onshore production will positively impact our cashflow, thereby increasing our capacity to reinvest.

Trinity’s Galeota East Coast licence will benefit from the proposals for reduced SPT for new shallow marine wells. The Company paused a farm-out process in May 2022 in anticipation of fiscal reform, and is now progressing alternative development concepts for Galeota, specifically the potential to drill the Echo structure from the existing Trintes field platforms as part of a broader concept to accelerate the production of existing 2P reserves from Trintes.

This could enable Trinity to deliver a lower-risk development solution that is more capital efficient and delivers production earlier than if a new standalone platform was used. Similar fiscal benefits will accrue to initiatives on the Company’s West Coast assets that we expect to progress in 2023.

Source: Trinity Exploration & Production

Reach Subsea

October 14, 2022, by Nadja Skopljak

Norway’s Reach Subsea secured a “larger” contract for first post-pandemic job .Several contract extensions encompass projects in Trinidad and Tobago and Northern Europe. The contracts are an indication of good development in terms of utilization of its resources for Q4 2022 and into Q1 2023.

Jostein Alendal, CEO of Reach Subsea, said:  “Reach Subsea is well positioned with a complete suite of services for a global subsea services market that continues to develop strongly. Now, we are looking forward to serving our customers in Trinidad and Tobago again for the first time after the pandemic. The contract is a result of great collaboration and teamwork.”

At the beginning of September, Reach Subsea announced it had secured new contracts amounting to around €20 million in total, including an “important strategic” contract in Brazil. The contract in Brazil is the first result of a strategic partnership with a Brazilian offshore company.

 

bpTT President Campbell

3 october

David Campbell is excited about his new role as bpTT president. The company said while his appointment was announced in August, he began his duties on 1 October. Campbell spent weeks visiting the company’s onshore and offshore sites, touring Atlantic LNG and meeting with staff and stakeholders.

“I’ve taken the opportunity to learn more about the Trinidad and Tobago business, the talented and committed people who work here and I’ve had the pleasure to experience the warmth and hospitality of the people of TT.

“My focus will be on the efficient development of our gas resources for the benefit of the country and company and supporting the government’s priorities for the broader development of the energy sector, including opportunities for clean energy.”

After Campbell met the Prime Minister and Minister of Energy Stuart Young, bpTT agreed with the National Gas Company (NGC) on the renewal of their gas sales contract and made a final investment decision on Cypre which will move forward with first gas expected in 2025.

“It is an exciting time to be joining the Trinidad business. “We have just announced two major achievements with the signing of the NGC gas sales contract and the sanction decision on Cypre and over the next quarter I am looking forward eagerly to first gas from our Cassia C project, the commencement of drilling on our small pools programme and advancing the Lightsourcebp/bp/Shell solar project.”

Campbell was president of bp Russia for eight years.

National Gas Company of T&T Limited

NGC completes blue methanol deal

Oct 12 2022

A Purchase and Sales agreement has been reached that will allow the National Gas Company of Trinidad and Tobago to acquire blue methanol from the US based IGP’s Gulf Coast Methanol project. NGC announced that its subsidiary NGC Petrochemicals Limited had completed negotiations with Gulf Coast Methanol 1, LLC and its parent IGP Methanol LLC and sealed the deal.

“This milestone achievement marks the culmination of several months of collaboration, following the announcement of a term sheet signed by the parties in December 2021. The new agreement means NGC will soon be able to purchase blue methanol—a low-carbon petrochemical commodity—for trading through its expanding energy marketing and trading portfolio.”

NGC president Mark Loquan said, “NGC continues to prove its unequivocal commitment to the clean energy transition through partnerships such as these. We are following global markets closely, and see the enormous potential value to be tapped in the area of blue and green energy commodity trading. This partnership with IGP Methanol gives us a unique opportunity to expand our foothold commercially—as we enter new energy markets_and geographically, as we further grow our trading network beyond the shores of Trinidad and Tobago.”

Chairman of IGP Methanol, James S Lamoureaux, said, “IGP values its growing strategic partnership with NGC and their leadership in the ultralow carbon and renewable chemicals and fuels. This partnership validates our vision of delivering ultralow carbon and renewable, hydrogen-based energy to major companies around the world to help them meet their carbon goals. We are excited to be leading this next step to a fully renewable future.”

NGC said the inclusion of blue methanol in its portfolio will bolster the company’s reputation as an emerging player in the global clean energy space, and regional leader in championing the Green Agenda and sustainability. The move, the company said, is the latest in a suite of initiatives being pursued by NGC and the NGC Group to pave the way towards a carbon-neutral future for Trinidad and Tobago.
The blue methanol will come from IGP Methanol’s first world-scale blue methanol plant in Louisiana, which is being developed to supply the rapidly growing and unmet global demand for ultralow-carbon methanol. The first plant is expected to come on stream in 2026.
The plant will adopt the Topsoe SynCor Blue Methanol technology, which will utilise hydrogen to power its process. This significantly reduces the amount of CO2 emitted from methanol processing. NGC explained the plant’s produced carbon dioxide will be removed and directed either to sequestration or for re-use by carbon tech companies located adjacent to the plant, including the plan to recycle the CO2 into renewable green methanol.

NGC profit

NGC Group of companies recorded a net profit of TT$1.6B for the six months of the year ended June 30, 2022, a 260 per cent increase compared to a profit of TT$437M in 2021. The Group s revenues of TT$16.6B were TT$7.1B greater than revenues of TT$9.5B for the same period in 2021.

The rebound in commodity prices positively impacted revenues and margins. Prices of ammonia, methanol, liquefied natural gas and natural gas liquids (NGLs) rose by 185 per cent, four per cent, 457 per cent and 72 per cent respectively.

The first half of 2022 was overshadowed by the invasion of Ukraine and the escalating conflict and ensuing trade embargoes impacted energy supply in Europe, driving prices up.

“As a result, the 2021 trend of robust commodity prices has been maintained through this reporting period.”

The Group continued to focus on strengthening its business foundations and growing into new commercial areas.

To guide its work programme, the Group completed and submitted to the Ministry of Energy and Energy Industries its new strategic plan to 2025.

• The Board of Directors approved a revised approach to the execution of green agenda initiatives across the group, which will streamline efforts and maximise impact.
• Downstream, the NGC signed an agreement with Proman to lift methanol cargoes from Methanol Holdings (Trinidad) Ltd’s (MHTL’s) Point Lisas facilities, to allow for the expansion of its energy marketing and trading portfolio.
• A gas sales contract was also signed with Trinidad Cement Ltd (TCL) to support continued operations at its plants.
• With respect to the future of Atlantic LNG, the NGC said it continued to participate in discussions with Government and shareholders around unitisation, with negotiations now well-advanced.
• Expansion of the business beyond T&T remained a top priority in 2022.
• Group member Phoenix Park Gas Processors Ltd (PPGPL) acquired a new NGL terminal in Hull, Texas which opens access to markets in Mexico and the USA thereby diversifying the company’s income stream.

 

NGC is still a symbol of excellence

Oct 19 2022

New chairman Dr Joseph Ishmael Khan stated. that the National Gas Company of T&T Ltd is still a symbol of excellence in the company’s annual report.

“Looking now to the future, we have stepped into 2022 as a resilient, profitable, evolving group of energy companies, still a driver of national development, still a symbol of excellence. Whatever comes our way, we will meet it with the same spirit and dynamism that have brought us this far. We are intent on remaining relevant in the new age of energy, delivering ever more value for our country.”

NGC published its 2021 Annual Report, which presents the consolidated financial performance of The NGC Group for the period January to December 2021.

“The NGC Group of Companies recorded a profit of $2.6B for the financial year ended December 31, 2021, representing a strong recovery over the loss of $2.1B recorded in 2020. The group’s revenues of $23.6B were $12.2B greater than revenues of $11.4B for the year 2020. The rebound in commodity prices in 2021 positively impacted revenues, with prices for ammonia, methanol, liquefied natural gas (LNG) and natural gas liquids (NGLs) being 190 per cent, 92 per cent, 911 per cent and 112 per cent higher respectively. Moreover, exceptional items recorded in 2020 did not impact the organisation in 2021.”

Also driving The Group’s performance in 2021 was its unwavering commitment to enhanced value creation and the advancement of its Green agenda.
Among the highlights of achievements are new sales and supply contracts which will support the longevity of the gas-based downstream sector and the acquisition of Heritage Petroleum’s interest in Block 3(a), increasing NGC’s shareholding from 11.41 per cent to 31.54 per cent.

“The NGC Group continues to prove its value to T&T and its strength as a veteran energy business through its consistent performance and resilience in the face of adversity. The group’s robust recovery after a historically difficult year across the globe gives evidence of visionary and strategic leadership, dedicated and talented employees, a bold strategy for growth and a collective passion for service to this country.”

NGC stability

Sep 28 2022

President of the National Gas Company Limited (NGC) Mark Loquan says gas supply is an issue which the company has been working on for several years.

“Since 2011 we have not been able to get to the full capacity of our LNG and petchem assets and so on, and this is a treadmill we are now on…We would have said we are in a mature basin. You don’t have the big fields any more. You’re getting into smaller pools. If you have to think ahead you start to talk about the region, you start to talk about cross border, you’re looking at deeper water gas, so that clearly is a changing world as well,” Loquan told the post-budget analysis held by the T&T Chamber.

“it’s not business as usual” in the energy world, he reiterated things have to be done differently especially as the world move towards cleaner energy.

‘There are varying opinions as to when is the peak of gas and the peak of oil, but the truth of the matter is for T&T we have to be efficient on our gas, we have to get oil out of the ground because it is going to be increasingly difficult as you fast-forward in time to say I’m going to get my product to a market which is looking at a different carbon footprint and that’s the reality.”
What is important now is the Atlantic restructuring.

“A big part of this is incentivising the people like Shell to say we are going to invest in Manatee because then they have an outlet in the LNG train for many years and Manatee is actually going to give us big step change because all the stuff we are talking about in terms of Cassia Compression, Barracuda and all these fields to come are trying to keep us at a certain level until the big stuff like Manatee happens which is going to be between 2027/2028, so between now and then, hopefully we could try to stay steady.”

Emphasising that energy efficiency is critical he said this to be practised both in the homes and businesses.

“The lens you have to wear now has to include the region, including Guyana, Suriname, how we look at the Caribbean north of us and also play a role in changing that energy mix with small scale LNG.

 

Touchstone to bid on 3 onshore blocks

Oct 12 2022

Cascadura-1ST1 well lies in the Ortoire Block which may be one of T&T’s largest onshore gas reservoirs.

Canadian company Touchstone Energy could bid on as many as three of the eleven blocks offered by the Ministry of Energy in its onshore/nearshore 2022 competitive bid round. Paul Baay, President and Chief Executive Officer said that his company was excited by the onland prospects and will definitely bid.

“With the success we got at Coho and Cascadura and at Royston, there is no question we’ve got lots of interest from our side in some of those blocks. We are for sure. The parcels came out a little different from what we thought they would be, that’s one thing that has changed a little bit, but we will be definitely looking at quite frankly two or three of them for sure.”
He was also full of praise for the process and the quality of the seismic made available to the companies.
“It’s probably the best package we have ever seen in Trinidad. Like the data that’s available, ease of access, it’s the best package we have ever seen so it really helps to fine-tune the bid for sure.”

This is good news for the Ministry of Energy and the petrostate as it could mean further interest in blocks from companies looking for oil and gas onshore. If the bid round is successful it would mean more activity onland including more seismic work, drilling and hopefully production.
Touchstone’s interest and the success of the onshore bid round could be built around Touchstone’s own success in the Cascadura and Royston discoveries in which the company has said it made major gas and oil discoveries.

Touchstone started producing from its Coho discovery.

It announced that the Coho facility delivered first gas, representing the first onshore natural gas project to come onstream in Trinidad and Tobago in over twenty years.
The Coho area is located in the Ortoire block, where Touchstone has an 80 percent operating working interest and state-owned Heritage Petroleum Company Limited holds the remaining 20 percent working interest.
On September 26, 2022, the Coho facility was approved by the Certified Verification Agent with the Ministry of Energy authorizing facility commissioning. On September 27, 2022, Touchstone commenced commissioning and achieved commercial deliveries on October 10, 2022, with a field estimated sustained gross production rate of approximately 10.5 million cubic feet per day.
Touchstone said it will continue to monitor the Coho-1 well in an effort to optimize production. In conjunction with initial production, the company said it has also sold the 2.7-kilometre, 6-inch gathering line tying in its Coho facility to the Baraka natural gas facility to The National Gas Company of Trinidad and Tobago Limited (“NGC”).
Natural gas production from the Coho facility will be sold to NGC pursuant to a natural gas sales agreement executed in December 2020.

Baay said:”This is very exciting for the Company, as Coho production represents the first stage of diversifying our product mix in Trinidad. The Coho facility is capable of 24 million cubic feet of gross natural gas per day,giving us the ability to potentially add incremental production volumes through a combination of additional drilling and well optimization. I would also like to recognize the collective contributions of our team in making this project a success. Being the first onshore gas project in over twenty years, we have learnt from the process, which we expect will provide a strong foundation for continuous improvement as we proceed with our larger Cascadura project.”

On July 11th the Ministry of Energy launched its onshore/nearshore 2022 competitive bid round.
The blocks included Aripero, Buenos Ayres, Charuma, Cipero, Cory D, Cory F, Guayaguayare, St Mary’s, South West Peninsula Onshore, South West Peninsula Offshore and Tulsa.

Kimberlee London, Senior Geologist at the Ministry gave details of the blocks at the Seventh Conference of the Geological Society of T&T 2022 and said bids will be open for six months, with the deadline for submissions being January 2023.
The blocks are expected to be awarded in April 2023, three months after the close of the bid round.

In detailing a summary of the process London explained that prospective bidders must pay a bid fee of US$30,000 or the equivalent $TT prior to the close of bids. She said Clause Five was amended to allow payment in local currency as concerns were raised by some onshore operations.

This fee entitles the bidder to receive the data package and the right to bid on any or all of the blocks.

Each bid contains proposals in technical and commercial evaluation of the block, minimum work programme, minimum expenditure obligation and signature bonus.

Bids should be submitted under confidential cover to the Office of the Permanent Secretary, Ministry of Energy and Energy Industries by 12 noon on the deadline date.
All bidders are required to deliver an oral presentation in support of their technical and commercial evaluations to the relevant ministry personnel.

Successful bidders shall execute an Exploration and Production License with the state within 30 days of notification of their successful bid.
The decision proceed with E&P license was made because of legacy licenses and the challenge of having a Production Sharing Contract (PSC) on land.

Touchstone’s interest would be a welcome change from what has happened recently with the government’s 2022 deep water bid round attracting little interest as well as its shallow water bid round which failed.

Touchstone Exploration Inc. is a Calgary, Alberta based company engaged in the business of acquiring interests in petroleum and natural gas rights and the exploration, development, production and sale of  petroleum and natural gas. Touchstone is currently active in onshore properties located in Trinidad and Tobago. The Company’s common shares are traded on the Toronto Stock Exchange and the AIM market of the London Stock Exchange

Touchstone Exploration Inc. info@touchstoneexploration.com via touchstoneexploration.ccsend.com

TOUCHSTONE ANNOUNCES FIRST NATURAL GAS PRODUCTION FROM COHO

CALGARY, ALBERTA (October 11, 2022) –

Touchstone Exploration Inc. (“Touchstone”, “we”, “our”, “us” or the “Company”) (TSX, LSE: TXP) is pleased to announce that the Coho facility has safely delivered first natural gas, representing the first onshore natural gas project to come onstream in Trinidad and Tobago in over twenty years. The Coho area is located in the Ortoire block, where Touchstone has an 80 percent operating working interest and Heritage Petroleum Company Limited holds the remaining 20 percent working interest.

On September 26, 2022, the Coho facility was approved by the Certified Verification Agent with the Trinidad and Tobago Ministry of Energy and Energy Industries promptly authorizing facility commissioning. On September 27, 2022, we commenced commissioning and achieved commercial deliveries on October 10, 2022, with a field estimated sustained gross production rate of approximately 10.5 million cubic feet per day (approximately 8.4 million cubic feet per day net).

We will continue to monitor the Coho-1 well in an effort to optimize production. In conjunction with initial production, we have sold the 2.7-kilometre, 6-inch gathering line tying in our Coho facility to the Baraka natural gas facility to The National Gas Company of Trinidad and Tobago Limited (“NGC”). Natural gas production from the Coho facility will be sold to NGC pursuant to a natural gas sales agreement executed in December 2020.

Paul Baay, President and Chief Executive Officer, commented:

“This is very exciting for the Company, as Coho production represents the first stage of diversifying our product mix in Trinidad. The Coho facility is capable of 24 million cubic feet of gross natural gas per day, giving us the ability to potentially add incremental production volumes through a combination of additional drilling and well optimization. I would also like to recognize the collective contributions of our team in making this project a success. Being the first onshore gas project in over twenty years, we have learnt from the process, which we expect will provide a strong foundation for continuous improvement as we proceed with our larger Cascadura project.”

Touchstone Exploration Inc.

Touchstone Exploration Inc. is a Calgary, Alberta based company engaged in the business of acquiring interests in petroleum and natural gas rights and the exploration, development, production and sale of petroleum and natural gas. Touchstone is currently active in onshore properties located in the Republic of Trinidad and Tobago. The Company’s common shares are traded on the Toronto Stock Exchange and the AIM market of the London Stock Exchange under the symbol “TXP”.

For further information about Touchstone, please visit our website at www.touchstoneexploration.com or contact:

Mr. Paul Baay, President and Chief Executive Officer
Mr. James Shipka, Chief Operating Officer
Mr. Scott Budau, Chief Financial Officer
Telephone: 403.750.4487

Forward-Looking Statements
Certain information provided in this news release may constitute forward-looking statements and information (collectively, “forward-looking statements”) within the meaning of applicable securities laws. Such forward-looking statements include, without limitation, forecasts, estimates, expectations and objectives for future operations that are subject to assumptions, risks and uncertainties, many of which are beyond the control of the Company. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects”, “plans”, “anticipates”, “believes”, “intends”, “estimates”, “projects”, “potential” and similar expressions, or are events or conditions that “will”, “would”, “may”, “could” or “should” occur or be achieved.

Forward-looking statements in this news release may include, but are not limited to, statements relating to Touchstone’s development and exploration plans and strategies, including future well drilling and well optimization operations and field estimated production rates. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. Certain of these risks are set out in more detail in the Company’s 2021 Annual Information Form dated March 25, 2022 which is available under the Company’s profile on SEDAR (www.sedar.com) and on the Company’s website (www.touchstoneexploration.com). The forward-looking statements contained in this news release are made as of the date hereof, and except as may be required by applicable securities laws, the Company assumes no obligation or intent to update publicly or revise any forward-looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.

 

Woodside survey of Calypso gas field

Oct 08 2022

Woodside Energy will commence its Controlled Source Electromagnetic (CSEM) survey this month.

The Energy Ministry said the survey will provide valuable information about the company’s Calypso Project.
Calypso sits within Deepwater Block 23(a) and TTDAA 14 leased block, offshore where hydrocarbons have been discovered. It is the country’s first major discovery in this location.

During a tour of Woodside’s Controlled Source Electromagnetic Survey vessel docked in Chaguaramas, Kerry Nicholas, Superintendent Seismic and Survey Operations, explained the survey will cover at least 1600 square kilometres at a depth of 2200 metres and take approximately 70 days to complete after which the data gathered will be analysed by the technical experts on the vessel.

Energy Minister Stuart Young who was on the tour, stressed the importance of the project to T&T, saying it was another critical step for deep water resource development. This is the first time that this type of electromagnetic survey is being conducted in the country.

It is being done to plot the seabed in the deep water to gather necessary information for the development of Woodside Energy’s Calypso Project.

 

 

Low-carbon future

This is part one of a two-part series on the country’s energy transition.

TT vowed to reduce its carbon emissions by 15 per cent by 2030 as part of the Paris Agreement’s National Determined Contributions to prevent further devastation from climate change. National Energy, a subsidiary of the National Gas Company of TT, is tasked with developing the country’s energy-based industries. Dr Vernon Paltoo, president of National Energy, revealed plans for an overall energy transition to the goal of net-zero carbon emissions.

Traditionally, National Energy would have worked on the development of the petrochemical industry, specifically Point Lisas and Union Industrial Estates, and developing the initial methanol, ammonia and steel plants.

Now, as the energy industry globally is changing, it’s working on developing the renewable energy sector, creating energy efficiency in businesses, and overall carbon reduction in the country.

Paltoo said on October 1, that, recognising TT’s commitment to carbon reduction, and “the finite nature of our gas resources,” five-seven years ago, “We took a deliberate strategy for developing low-carbon industries.”

Renewable energy is the first way the country is moving away from using natural gas as fuel for power generation. The primary renewable energy project is Project Lara, the first utility-scale solar photovoltaic (PV) installation, which will convert light into electricity.

The 112-megawatt facility is based at Brechin Castle, Couva, and Orange Grove, Trincity. The Brechin Castle station will produce 92 megawatts and Orange Grove will produce 20 megawatts.

This will be a significant projectfor National Energy and the country, because it represents the first utility-scale PV project.

It’s not National Energy’s first PV project. Last year, it finished installing a solar canopy on the Preysal National Petroleum service station by the Point Lisas highway, which opened in September 2021.

“That’s 320 panels and 100-kilowatt installation.” During the major blackout earlier this year, “That was the only service station in Trinidad that was running, still because it had battery backup on that station.”

That project was a stand-alone PV facility, whereas Project Lara is a utility-scale facility, being built to put power supply into the T&TEC power grid. It will be the first of its kind in TT.

“It’s like a power station. That project has been in development for about two years now. The minister (of Finance) would have spoken about it extensively in the budget presentation.”

Paltoo said the plant will essentially displace gas, traditionally used in power generation. That gas can now be used for higher-value products for the benefit of the country, such as petrochemicals including ammonia and methanol, which earn TT significant revenue.

“We are now able to save that gas and use it elsewhere…In terms of cost, from an unsubsidised point of view, it is an economical proposition for the country, because we have low-cost fuel and low-cost power at present.”

Project Lara is being built by a consortium of two of the biggest energy companies operating in Trinidad, BP and Shell, and also BP Light Source, an arm of BP that specialises in renewable energy. The companies were chosen through public tender by the Ministry of Energy.

With the available technology, the country cannot switch to a full solar-energy power, because lithium-ion batteries for energy storage are so expensive. Battery storage can increase the cost of a project by as much as 100 per cent.

“It cannot be exclusively solar. It has to be a mixture, because at night there is no sun. We have to go back to fossil fuels at night unless there is battery storage.”

Project Lara, like most utility-scale projects, does not involve battery storage. Paltoo said solar power is a balancing act.

“You optimise the resources that you have, from an economic perspective, to get the best output at the lowest cost.”

National Energy plans to introduce a 60-tonne bollard pull tug to its fleet which will reduce emission of nitrous oxide by up to 80 per cent. This tug is currently under construction. – Photo courtesy National Energy Converting to renewable energy is not simple or: “We would have done it a long time ago:

He said it’s complex “to balance and create the necessary engineering tasks” for “an uninterrupted supply of power that we are accustomed to.”

Renewable energy is just the first step in carbon reduction.

“What we want to do is create a sustainable energy industry for the future,” Paltoo said.

A sustainable energy industry would no longer require natural gas to provide revenue for the country. National Energy is building a strategy and framework to allow the country to transition from natural gas into low-carbon fuels while maintaining TT as a major commodity producer, even in ammonia and methanol.

“That is not something that happens today or tomorrow. It is a long-term strategy that we build, and renewable energy is the first building block.” Then there’s energy efficiency “where we have to live or start producing outputs for less energy, and that comes with making better use of the power and the energy we currently use.”

TT is currently a “significant user of energy” on a domestic and industrial scale.

National Energy is developing a project called Super ESCO (Energy Services Company) to go into companies and do an audit on how to reduce energy use.

“So it’s a win-win situation, where we work with companies and we will be able to drive a change, so they are able to use less energy. And again, as we save energy, it means that we have access to our fossil fuels to get higher-value products…It also means we are reducing the carbon footprint of these industries.”

Asked if Super ESCO has chosen the companies, Paltoo said background work had been done, but it would be premature to discuss which companies would be audited.

Carbon cutting: the big picture

National Energy has a long-term goal for carbon-cutting: eventually, the country will transition away from natural gas completely. Paltoo says natural gas will continue to be an important resource.

“However, understanding the global impact of fossil fuels, as well as the economic value proposition to transition to a low-carbon economy, what we are doing is building a framework and a long-term plan that will allow this country to eventually become a low-carbon or decarbonised state in terms of energy usage and energy production.”

National Energy is working with the Inter-American Development Bank to create a roadmap and strategy to create a hydrogen economy in TT. That study is close to completion.

“We are going to move away from fossil fuel and go into clean hydrogen as the fuel of the future. using natural gas as the transition fuel.”

In decades to come, Paltoo foresees, “We can transition our entire industrial sector, transportation sector, our power-generation sector into low-carbon clean fuels, using hydrogen.”

Clean hydrogen is created in several steps using renewable energy and electrolysis (using electricity to split water into hydrogen and oxygen). That hydrogen will be used in power generation and transport.

“That is where the world is heading, and we are well positioned in TT, because we have the infrastructure, the energy infrastructure, and the gas infrastructure already. “ The country already produces almost two million tonnes of hydrogen a year for the petrochemical industry, he explained, and now it can take that hydrogen, “which is produced currently in natural gas, and gradually reduce the amount of carbon footprint in that hydrogen production to almost zero.”

That involves building a sustainable renewable energies industry.

Hydrogen

Dr Vernon Paltoo, president of National Energy declares the petrostate is perfectly positioned as an energy producer to transition into a green-hydrogen economy.
Grey hydrogen is created from natural gas.
Blue hydrogen results when carbon dioxide emitted in grey hydrogen production is captured and stored.

Green hydrogen from renewable energy does not require use of gas.  A national programme on carbon capture, utilisation and storage (CCUS) will be launched in the near future, Carbon emitted when grey hydrogen is produced will be stored in a carbon-reduction measure.

“So we are looking at how to do that in an economical fashion. If we are able to capture that carbon dioxide, we transform it to blue hydrogen, which has a lower carbon footprint – but that does not mean that carbon dioxide does not exist. It means that we capture it and store it underground, or we find another use for it in terms of another product or an input to another product.”

This intermediate step leads to green hydrogen, where carbon is not used.   Efforts are ongoing to formulate a strategy and a plan to produce blue hydrogen or carbon-capture utilisation.   In the energy economy, some infrastructure for a clean energy transition that leads to net zero-carbon emissions already exists.

“Because of TT’s history in the energy sector, the country is well positioned to make a transition to clean energy. That is again where we benefit from what we have already. We do actually have some of the infrastructure required, as a result of our gas and oil industry.”

Renewable energy will come from solar photovoltaic (PV) or wind energy, and create power that drives the electrolysers. These devices use electricity to split water into hydrogen and oxygen. The hydrogen is used to create green hydrogen and no carbon is associated with its production.

“That is where we are going in the future with the production of green hydrogen only from renewable energy. Renewable energy will be a combination of solar and wind, right for the future, because we don’t have sufficient land space in terms of producing enough electricity with solar PV: that is why we have to use wind as well.”

Studies will determine the best locations for wind energy.  Adoption of green hydrogen as an energy resource to replace fossil fuels will begin in 2050 or 2060. While green hydrogen is planned as a long-term initiative, pilot plant programmes may start next year.
Adoption of a clean energy industry seems slow because studies and plans for a transition take time.

“These things don’t just happen overnight. We start today because all of the studies, .. projects .. pilot plant studies have been done. All the funding for these things have been done to start the transition…we have a unique position in terms of where we can position this country to be a leader in the production of hydrogen in the region.”

The country is on course to hit the target of 15 per cent carbon reduction by 2030.
“We would reach that easily because of the projects that we started.”
Project Lara alone would help reduce carbon emissions significantly.
“..initiatives that the country will take into account between now and 2030 are all geared to getting us to that 15 per cent reduction by 2030.”
The long-term goal now is to achieve net-zero carbon emissions.
“When we get to 15 per cent, we still have 85 per cent of our emissions. That’s the point where you want to get to zero . Zero means we use no fossil fuels at all, nothing, no gas in the gas station. Nothing at all for power generation. That in itself is a global shift that is not something unique to TT.”

According to the UN Environment Programme, TT is ranked as a large carbon emitter per capita, with 36.4 tonnes of greenhouse gasses emitted per capita. But don’t let the numbers fool you, TT is also the 81st carbon emitter globally with 47.49 million tonnes of greenhouse gases released in 2018. China, the overall largest greenhouse gas emitter released13,739.79 million tonnes of greenhouse gases in 2018 but is regarded as only emitting 9.71 tonnes of greenhouse gas per capita.

On an absolute basis the country is a small emitter but on a per-capita basis, it’s ranked high, because of the small population of 1.4 million, coupled with the fact that TT is a large petrochemical producer. Ammonia alone produces a lot of carbon emissions.

“So on a per-capita basis we have a high emissions ranking, but on an absolute scale, we are not significant. It is not a large quantity. As a small country, these things have to be taken into context. because our absolute numbers are not high…But that does not mean that it is something to ignore, or we shouldn’t be cognisant of our role as global citizens. We all have a part to play. Every country has a role to play in carbon reduction.”

The country is on track with the energy transition and a low-carbon future. “As a country, we are committed to a strategy that will get us there. That is all work in progress…We see the creation of a hydrogen economy as the end goal, and that is what we will be ultimately working on with all of these projects that we are doing with the creation of a low-carbon energy industry into the future.”

Almost everything must make economic sense, which is why the energy transition is so structured.

“..projects have to be driven by sound economic fundamentals. .. based on our experience and track record with gas in particular, we are comfortable that we have the necessary competitive base to operate in that space where we are competitive in terms of driving this project from an economic perspective…the projects can stand on their own from an economic perspective and that’s very important.”

This week Paltoo spoke at H2LAC, the second Hydrogen Conference of Latin America and the Caribbean in Colombia. He discussed from a regional perspective how TT could be a leader in driving a hydrogen economy that will turn its energy industry into an asset for the entire region in the future.

Oil revenue almost  double estimates

 Oct 28 2022

Government  banked more revenue than initially expected from oil companies.

In 2021  tax collection from oil revenue was $3.1 billion while in 2022 Government estimated that figure to be $5.53 billion.  However, the latter figure was actually doubled,  Finance Minister Colm Imbert told     the “Conversations on Energy and the Economy” hosted by the Energy Chamber

“What we actually found when we did our estimates just before the budget in October 2022 was instead of getting $5.53 billion in revenue from the oil companies we got $10.45 billion, almost twice as much. In 2021 taxation from oil companies was $3.1 billion out of total revenue collection from taxation of $16.8 billion. So oil companies contributed less than 20 per cent of tax collections in 2021. In 2022 our preliminary estimates oil companies are now contributing 10.4 billion out of $20.7 billion; that’s 35 per cent.”

The Finance Ministry statement    said the Board of Inland Revenue has since finalised the actual revenue figures for fiscal 2022 and it has been determined that the total revenue in fiscal 2022 was $54.21 billion.  This was $2.57 billion more than the revised estimate announced in September 2022, and $10.88 billion more than the original revenue estimate of $43.33 billion for fiscal 2022, made in October 2021.

The ministry was now in receipt of the final figures for the actual revenue collections in fiscal 2022, up to the end of September 2022.

“At the time of the presentation of the 2023 budget on September 26, 2022, the revenue figures for fiscal 2022 were based on actual figures, from October 1, 2021 to August 31, 2022, and estimated figures for September 2022,” the statement explained. With total expenditure for fiscal 2022 now estimated at $54.54 billion, the fiscal deficit for 2022 is now estimated at $329 million, which is less than 0.2 per cent of GDP, well below the international benchmark for fiscal deficits of three per cent of GDP.

“In essence, we have achieved an almost balanced national budget in fiscal 2022, something that has not occurred in T&T since 2008, 14 years ago,” the statement added.

[…Hopefully, this $2.5 billion bonanza can be added to the Agriculture budget to stave off  starvation and fund food farms threatened by floods, ramshackle infrastructure ,   larceny, and violent crime. 

 

Budget FY2023: A double-edged sword?

Bourse Securities
Oct 01 2022

www.bourseinvestment.com

Bourse provided an overview of the FY2023 Budget, with announced fiscal measures likely to make an impact on consumers and investors alike. As we enter into the new fiscal period with forecast economic growth, what could be the themes and/or announcements that drive investor opportunities? We discuss below.

Revenue, Expenditure Forecasts Soar

FY2023 total revenue is projected at $56.2B, 8.9% higher than $51.6B estimated in FY2022. Forecast revenue is expected to increase as a result of (i) windfall profits derived from robust global energy commodity prices and (ii) a modest recovery in domestic energy production. Budgeted Revenue for FY2023 was predicated on an oil price assumption of US$92.50/barrel and natural gas price of US$6.00/MMBtu. Oil Revenue is estimated at $25.0B, while Non-Oil Revenue is projected to be $30.2B.

FY2023 estimated total expenditure is $57.7B, up 6.7% from FY2022’s revised estimate ($54.1B), resulting in a projected FY2023 fiscal deficit of $1.5B. Despite the measures taken to reduce or reallocate expenditure in this budget, projected total expenditure if realised would be T&T’s 3rd highest spend during a fiscal year. Considering less predictable revenues, given global developments and volatile energy markets, more meaningful downward adjustments to Expenditure may be required to achieve balanced/surplus budgets in the future.

More Positive Growth in 2023?

The MoF estimates real gross domestic product (GDP) growth in FY2022 of 2.0%. The energy sector is expected to grow by 5.0%, while the non-energy sector is expected to contribute 2.0%. This positive trend is projected to continue in FY2023 & FY2024, with Real GDP growth estimates of 3.0% in each year. Real GDP is projected to improve from $150B in FY2020 to $153B in 2022. It is important to note that T&T’s GDP relies heavily on the energy sector, which contributed approximately 50% of GDP in FY2022. Though the energy sector has improved, hints of a global recession and economic tensions could adversely influence this traditionally cyclical market.

Debt Metrics Improve?

Debt:GDP, as measured by the recently implemented adjusted general government debt to GDP ratio, peaked at 81% during the onset of the COVID-19 pandemic in FY2020. The MoF estimates Debt:GDP in FY2022 will be 70%, a welcome moderation in the level of a key indicator of sovereign creditworthiness.

The decline in the FY2022 ratio has been more a function of a sharp recovery in Nominal GDP levels (FY2022 estimate: TT$190 billion), as opposed to a reduction in the total outstanding amount of Adjusted General Government Debt (FY2022: TT$129.8 billion). Adjusted general government debt comprises central government domestic debt, central government external debt and non-self serviced government guaranteed debt. The measure excludes self-serviced government guaranteed debt; debt serviced directly by various state enterprises and statutory authorities and not by the GORTT.

Fiscal Measures: A ‘Give and Take’

The general reaction to the fiscal measures coming out of the FY2023 national budget appears to be mixed, with some concerns on how consumers and consumption activity will adjust in the year ahead.

Notable measures intended to directly benefit consumers include

(i) an increase in the Personal Income Tax Allowance and

(ii) a one-time transport grant of $1000 in 2023 to all recipients of social grants.

The proposed increase in personal income tax allowance would result in all individuals earning up to $7,500 per month or greater enjoying an additional $500 monthly income tax shield. This would work out to an extra $125/month in disposable income. The transport grant of $1,000 would be available to all recipients of social grants (public assistance, disability, food support and senior citizens pensions) and works out to just over $83/month in additional income. It should be noted that the transport grant facility is temporary, remaining in place only if the price of oil remains elevated.

At the same time, other announced initiatives/measures could directly reduce disposable income available to consumers. These include a

(i) reduction to the fuel subsidy (higher fuel prices at the pump),

(ii) the implementation of property tax and (iii) reductions in the air-bridge/ferry service subsidy.

The Minister of Finance announced increases to the prices of super and premium gasoline prices rising by $1/L. Cognizant of the impact on general freight and consumer transport prices, Diesel prices were raised by $0.50/L, as it accounts for 40.0% of total fuel consumption in T&T. These latest increases bring the year-on-year changes in super, premium and diesel prices to $2/L (40.2%), $2/L (34.8%) and $1/L (29.3%) respectively.

As an example, an individual driving from Chaguanas or Arima to the Port-of-Spain (PoS) Ferry terminal typically covers 60km roundtrip on a daily basis. On a monthly basis, then, individuals (working in POS) would traverse about 1,200km getting to and from Chaguanas/Arima to POS. An individual driving a super gasoline-fuelled vehicle with an average fuel consumption of 27 miles per gallon (10.5litres/100km) would now be spending an estimated additional $252 (10.5L x $2 x [1200/100]) on fuel than a year ago.

The Government of Trinidad and Tobago expects to commence the collection of property taxes in FY2023, following several years of development. Having surpassed the minimum valuation threshold of 200,000 valuations, Residential properties will be the first class of properties subject to the “new” tax, followed by commercial, industrial, and agricultural properties. While this represents an additional revenue stream for the state, it would also result in an additional tax obligation for the population.

To a lesser extent, the reduction in subsidy to inter-island travel by sea/air also reduces disposable income to consumers. Travel via the airbridge will be increased by TT$50 (One-Way) from the current price of TT$150. Inter-island sea bridge fares will also be increased between $25 to $50 one-way.

Investor- Specific Initiatives

Following the successful additional public offering (APO) of First Citizens Group Financial Holdings (FCGFH), investors may be left wanting for more capital market opportunities in FY2023.

The T&T Mortgage Bank (TTMB), a newly-created entity formed from the merger between the T&T Mortgage Finance Company (TTMF) and the Home Mortgage Bank (HMB), is now expected to commence operations early 2023.

While intentions of an initial public offering (IPO) of the TTMB were previously announced in the FY2022 budget statement, no mention of IPO timing was made in FY2023. Estimates of the value of shares held by GORTT in the newly-formed TTMB are in the range of TT$600-700M. Regional rating agency CariCRIS reaffirmed its corporate credit rating for HMB (CariA- on September 22, 2022) and downgraded the credit rating of the TTMF (from CariAA- to CariA+ on October 5, 2021) on account of deteriorating asset quality metrics.

Increased SME Incentives

A full tax holiday extension for newly-listed small and medium enterprises (SME) listing on the T&T Stock Exchange (TTSE) from 5 to 6 years was announced. These tax concessions would apply to Corporation tax, Business levy and Green Fund levy, with the intention of assisting SME growth while also facilitating development of local capital markets.

Despite the attractive incentive packages, the last SME listing would have taken place in 2019. Currently, just 2 listings exist on the SME sector of the TTSE; CinemaOne Limited (CINE1) and Endeavour Holdings Ltd (EHL) with a combined current market capitalization of $268M.

The Bourse View

At a macro level, near-record national revenue and expenditure should bode well for economic activity in T&T’s upcoming fiscal year. While expenditure has proven to be fairly ‘sticky’ in nature, however, revenue has been the historically more volatile component of the budget equation. Meeting these lofty revenue targets will be highly reliant on very favourable conditions in the energy sector, including:

(i) projected domestic energy production recovery and

(ii) resilient energy commodity prices in an environment fraught with uncertainty.

Non-energy sector revenue, while less volatile, may be tested by more cautious consumers.

At a more granular level, the proposed fiscal measures and other initiatives – when combined with prevailing inflationary pressures and the swirling global recessionary conditions – could result in a weaker consumer in the year ahead. The give measures of increased personal income tax allowances and fuel grants are highly likely to be more-than-offset by ‘take’ initiatives such as property taxes and fuel subsidy reductions.

Though consumers and investors will approach FY2023 with perhaps a degree of cautious optimism, the downside risks remain palpably evident.

_____

For more insight and perspective into

(i) how the FY2023 budget could impact investors and consumers and

(ii) how investors may want to navigate the current financial markets, join us for our free Bourse Investor Webinar on Thursday October 6, 2022. Email info@boursefinancial.com to register.

 

 

Government supports hydrocarbons, analysts cautious

When he presented the 2022/2023 budget in the House of Representatives, Finance Minister Colm Imbert was optimistic that changes to the supplemental petroleum tax (SPT) is the one move that could encourage new investment in the energy sector.

Energy Minister Stuart Young shared Imbert’s optimism. However, former energy minister Kevin Ramnarine and UWI economist Dr Vaalmiki Arjoon, said optimism about improvements in the energy sector could be balanced with the necessary caution that goes with the volatile nature of the global energy industry.

On the basis of a careful analysis of TT’s competitiveness as an oil province for investment, Imbert said, “I propose to enhance the current SPT concession for small onshore oil producers and introduce in 2023 a tiered system of SPT at lower rates for shallow-water marine operators, as opposed to the current fixed rates of SPT of 18 per cent, 25 per cent and 33 per cent that kick in as soon as the price of oil crosses US$50 per barrel.”

Imbert outlined how this system would work-

“Firstly, the production limit for small producers of oil on land to benefit from the previously increased threshold price of US$75 per barrel for oil before SPT is applicable will be increased to 4,000 barrels a day.”

In relation to new oil wells in shallow-water marine areas, whether in existing fields or new fields, Imbert outlined SPT rates for them.

These measures will require amendments to the Petroleum Taxes Act Chap 62:01 and will take effect on January 1, 2023.

“We believe that these reduced rates of SPT for new oil production in the marine areas will allow companies to access the required financing to increase their drilling and get approval for new exploration and production programmes, thus increasing the production of much needed oil.”

The methodology for determining what will be defined as a “new” well will be discussed with oil companies before the new SPT rates are implemented in January.

Government is “looking at adjustment of other oil and gas taxes and other innovative fiscal incentives to encourage new investment in the sector. We will advise on these and other adjustments to the energy tax regime in due course after consultation with the oil and gas companies.”

As he reflected on the economic challenges TT faced over the last two years during the covid19 pandemic and new challenges posed by ongoing events such as invasion of Ukraine , Imbert underscored the continued importance of the energy sector to the economy.

“As an oil and gas-based economy our fortunes have been impacted by the external shocks which have hit the world economy in recent years.”

While this has been happening, as evidenced by the fact that the non-oil sector now contributes over 50 per cent of TT’s GDP (Gross Domestic Product), the energy sector remains key to future economic stability and growth.

“It is a fallacy for people to insist that we should not focus on enhancing and strengthening our oil, gas, and petrochemical sectors.”

Those who say TT should abandon oil and gas, “are not living in the real world, since this has been the mainstay of our economy for the last 50 years and will be a cornerstone of our economy for years to come.”

Young said fiscal measures announced in the budget in relation to the energy sector, including the proposed SPT changes, were based on submissions made by his ministry and collaborations with Imbert.

“The government is focused on promoting and facilitating exploration and production of oil and gas and keeping TT’s hydrocarbon industries going as we compete for local and global capital and investments. We recognise that we are a mature (energy) province and that we need to revise the fiscal landscape to find an appropriate balance between earning revenue for our resources whilst making it attractive for companies to spend money on exploration and production to achieve a good return.”

Ramnarine said the domestic energy industry has been calling for changes to the SPT for the last six years. But he said: “I don’t think that it goes far enough. It is really going to give a marginal change in the attractiveness of investment opportunities.”

Ramnarine did not see the proposed SPT changes “exciting the industry to the point where people will want to invest.”

He believed energy companies “are now crunching the numbers to see how it will impact on the net present value of their future investments.”

He would have given a lot more than the changes proposed by Imbert.

“I think the minister needs to go a lot deeper with the changes in the SPT.”

Ramnarine added that SPT is focused on oil production and has no bearing on gas production. With a need for both oil and gas production to increase, he was hoping to see a decrease in the royalty rate for natural gas.

“The changes that I heard (in the budget presentation)…really are geared towards oil production, because SPT is applied to the production of oil and condensate. We have a fundamental problem with natural gas production in TT.”

Ramnarine reiterated the need to look at the royalty rate applied to natural gas production, currently 12.5 per cent.

“Obviously that is a deterrent, because since it was introduced in 2017, natural gas production has only gone in one direction – which is down.”

He added that a sliding scale for the royalty rate for gas production may have been a better approach to take.

“But it is what it is.”

Touching on petroleum profits tax (PPT) being reduced from 30 to 35 per cent for deepwater production and exploration, Ramnarine said, “I don’t see how that makes any sense. We currently have no production of oil or gas from deepwater (acreages).

This is compounded by Government’s not awarding any deepwater acreages to any company or consortium since 2014.

“I don’t really see that as having any material impact on anything at this point in time.”

Imbert said the proposed PPT decrease was aimed at incentivising crude oil production and “to sustain the current level of hydrocarbon reserves. “

Deepwater exploration costs are significant and the proposed PPT decrease will “increase and stimulate production.”

Arjoon said, “Despite the forecasts of the international agencies, it’s too optimistic to peg the budget on an oil price of US$92.50 per barrel.”

Imbert said, “Based on consideration of all forecasts by credible international organisations, our oil price assumption for 2023 will therefore be US$92.50 per barrel and our natural gas price assumption will be US$6 per mmtu.

Arjoon commented, “Oil prices have started to fall, given the reduction in demand caused by multiple interest-rate hikes by the US and other economies.”

The US rate increase, Arjoon continued, strengthened the US dollar

“This, together with global inflation, caused an economic slowdown and reduced the pace of growth in merchandise trade, thereby causing oil prices to drop.”

Arjoon said the upcoming winter and the complete embargo on Russian oil by Europe, carded for December, might cause prices to go up.

But he added, “Again, this could be suppressed, if Russia continues to sell oil to Asia at a much-lowered price.”

Arjoon wondered whether Imbert chose to peg the budget on an oil price of US$92.50 per barrel “to limit the possibility of having to place excess petroleum revenue in the HSF (Heritage and Stabilisation Fund), which would be the case once prices stay in this vicinity.”

On proposed SPT changes mentioned by Imbert, Arjoon said, “It may also be the case that the lowering of the threshold for small producers for the SPT to take effect is to encourage them to increase production via enhanced oil-recovery projects in mature wells, which would otherwise not have the attention of the large producers, as the investment return for this might not likely be viable for them.”

He observed that recent bid rounds have not been very encouraging, suggesting that energy companies are not too pleased with the fiscal regime.

“Gas production is currently 27 per cent lower than production at the end of 2018, with little optimism for meaningful increases in the short to medium term. Our output is not adequate for the downstream producers and for the three trains at Atlantic LNG to run at near-full capacity.”

In such an environment, Arjoon said, “The incentives to the energy companies should have been more aggressive.”

He did not believe the five per cent decrease in PPT mentioned in Imbert’s budget presentation was adequate, “especially since much of our reserves are in deep-water, which to monetise requires significant capital expenditure by the upstream producers.

“They will have a required rate of return, as investment into deepwater exploration is a major investment decision, plus there are possibilities they could stumble upon dry holes. Therefore the return must compensate for the risk being taken.”

Arjoon said the proposed five per cent reduction in PPT is not likely to be sufficient, “unless the state was told by the upstreamers that the five per cent cut would push them over their hurdle rate.”

In the present low-production environment, Arjoon suggested Government “ought to discuss with the upstreamers what is the rate of return they require for bringing the gas production up to 4 bcf/d (billion cubic feet per day), to adequately meet the demands of the downstreamers and allow Atlantic LNG to operate at near full capacity.”

The Energy Chamber was pleased with fiscal measures in the budget relating to the energy sector, including the proposed changes to the SPT.

It said, “The reductions in the SPT rates for new wells in marine fields and the extension and expansion of the changes introduced in 2020 for small onshore producers are welcomed and will help the economics of new investments in oil projects.”

The chamber had been calling for this change for over a decade.

“This change represents the first major adjustment for offshore oil producers. The changes will also help create greater investor interest in the on-going onshore bid round.”

The chamber welcomed Imbert’s commitment to meet with the oil and gas industry over the next three months to review further potential reforms to the fiscal regime.

The chamber thanked Imbert for collaborating with it in making the changes he announced .

 

IMF

The global economy would grow by 2.7% next year, down from the 2.9% it had estimated in July. It noted that the three major economies—the United States, China and Europe—are stalling.

For T&T, as Morgan Stanley predicted, it is likely to lead to continued strong LNG prices in the short to medium term. Europe is bent on not depending on an unreliable and unstable partner like Russia, and even if the war ends tomorrow, there is unlikely to be a rapprochement that leads to the dependence on Russian gas that was evident pre-February 24.

The challenge Europe faces is that there is a limit in terms of the speed at which infrastructure and gas supplies can be ramped up to meet the challenge. Prices adjust in order to correct or eliminate excess supply and demand.

In this case, demand exceeds supply and for the short run while supply ramps up, prices will be higher. It is, therefore, heartening to see that T&T’s natural gas production increased in the fourth quarter of the fiscal year, and most of that additional gas went into LNG, methanol and ammonia production.

If T&T is able to increase production of natural gas any further this could help because as OPEC predicted, demand for oil, in particular, will be down and again prices will coordinate the market place and when the willingness to pay reduces, demand falls. Therefore, the outlook is for continued strong LNG and petrochemical revenue and lower oil revenue than was experienced this year. The Finance Minister may have some adjusting to do come the mid-year review 2023.

The impending recession in the EU, the US and lower growth in China will lead to lower demand and inflationary pressure faced by the globe and consumers may start to recede. This, however, is a two-edged sword that could hurt T&T’s manufacturers and Tobago’s tourism hopes.

Recession in the UK and Europe could impact tourist arrivals in the Caribbean and hurt regional economies. T&T’s manufacturing sector is heavily reliant on the regional markets for its sustenance and any fall in the purchasing power of those markets leads to a ripple effect at home. In these perilous times. the Minister of Finance has to be prudent and skilfully manage the economy in the next two years. He will have to seek growth while at the same time working with his colleagues and the private sector to transform the economy. He will have to insist on value for money and ensure the procurement legislation is in place to reduce the level of corruption.

He will have to be aware that the population has had to sacrifice for seven years and understandably, there is both pent-up demand and built-up anger. He and the Prime Minister will have to create a path to a better tomorrow, clearly articulating a vision and try to see if they can get a consensus on the way forward.
These higher revenue streams are fleeting, providing some breathing room. It had nothing to do with this Government. and should not be wasted again.

 

 

Atlantic Council

Oct 21 2022

Energy Minister Stuart Young joined a discussion hosted by the Atlantic Council’s Adrienne Arsht Latin America Center Caribbean Initiative and the Atlantic Council’s Global Energy Center .

Young in his feature address highlighted the importance of energy security for the Caribbean region and the world at large noting that the issue has become a “key item of priority for governments of the world”.
“T&T is exploring how we can move towards being a stable energy security entity in the Caribbean and Latin American region.”

Young also indicated the potential of utilising T&T’s existing capacity in LNG and Ammonia (and other Petchem commodities) provided that it has access to produce nearby proven gas reserves.

The minister concluded by congratulating the Atlantic Council on the launch of their Caribbean Energy working Group which will look at pre-existing and emerging challenges on the energy front for Caribbean countries and how US policy makers and the private sector can work together to support investment and security in the energy space both for the Caribbean region and the broader global community.

Young was on the panel of speakers which included Pepukaye Bardouille of the International Finance Corporation, Fernando Zúñiga of MPC Energy Solutions, David Goldwyn, Chairman, Energy Advisory Group, Adrienne Arsht Latin America Center.
The discussion was moderated by Jason Marczak, Senior Director, Adrienne Arsht Latin America Center, Atlantic Council.

The hour-long discussion reflected upon US initiatives to support energy resilience and security in the Caribbean and what steps the US government and private sector should take to support the region’s energy plans.

The panellists also discussed topics such as multilateral development banks, the importance of engagement at scale and adapting policy for the region, the importance of a long-term outlook and how the Caribbean region can play a critical role in energy security not only within its own region but within the broader Latin American region.

Atlantic Council’s Adrienne Arsht Latin America Center’s Caribbean Initiative began programming in February 2021 and is a platform for US and Caribbean stakeholders to offer new and innovative insights to benefit a closer US-Caribbean partnership and the overall prosperity, stability, and well-being of the region.

 

 

Lake Asphalt, UWI to improve roads

14 OCTOBER

Works and Transport Minister Rohan Sinanan said a partnership between Trinidad Lake Asphalt and UWI will help improve the quality of roads. The asphalt-based cement developed by Trinidad Lake Asphalt which is currently used for airports, highways, and major roads would now be used on secondary and tertiary roads.

“This Trinidad Lake Asphalt produce is very costly but we have been able to work with the company to be able to reduce the price and get a constant supply of a more solid product which we want to use on all roads in TT. Trinidad Lake Asphalt is also working with UWI to create further improvements which will give a more solid surface. We want our roads to be able to withstand the increasing weather effects being caused by climate change.”

Sinanan said his ministry will be focusing on roads, drains and transportation infrastructure with its allocation from the 2022/2023 budget. Among the plans are proper regulations for the quality of hot mix; the revamping of road maintenance strategies with the help of the Inter-American Development Bank; the hiring of small contractors to fulfil small patch contracts in order to supplement the ministry’s fleet of patcher; working with WASA to have a quicker response to leaks; reviewing the designing and repair of roads so they last longer; and the recycling of aggregate products to use less asphalt in preparing roads.

Sinanan said bridges and landslips would be another focus of his ministry, as well as drainage and coastal erosion. The Caroni River system would be receiving attention next year, including the upgrade of sluice gates, new pumps, gates and pump houses.

Many drainage and infrastructure plans developed in the past had not had an operational component, so the Andean Bank was now developing operation plans from these plans.

Sinanan was concerned by the malicious attacks on infrastructure by the public recently. This came at a considerable cost to the ministry and the communities which were flooded due to this vandalism and he pleaded with people not to interfere with infrastructure.

 

UWI

September 22

Three outstanding lecturers from UWI St Augustine were honoured at the annual UWI/Guardian Group Premium Teaching Awards at the Learning Resource Centre on September 22. They were Dr Suzanne Burke from the Faculty of Humanities and Education; Dr Amy Deacon of the Faculty of Science and Technology; and Dr Bephyer Parey of the Sir Arthur Lewis Institute of Social and Economic Studies.

The Premium Teaching Awards is part of the university’s commitment to provide a dynamic, student-centred learning environment in which student learning is pursued as a primary goal of the academy, and excellence in teaching is recognised and rewarded. The biannual event has honoured teaching excellence at the St Augustine campus since 2000. This year’s theme was Ready, Set, Click: Negotiating Quality in the Blended/Online Teaching and Learning Environment, emphasising the ability of the campus to successfully engage in blended/online teaching and learning.

Prof Rose-Marie Belle Antoine, pro vice-chancellor and campus principal, congratulated nominees who willingly put their work and themselves out for independent review and feedback. She extended her gratitude to the team at the Centre for Excellence in Teaching and Learning (CELT) who ensured the essential quality of online and blended teaching and learning approaches during the campus closure due to the pandemic.

“As a way of addressing teaching and learning continuity at the UWI St Augustine Campus, CETL designed and implemented a number of workshops and capacity-building activities to support teaching and learning in the emergency remote-teaching setting. These activities served to foster a much-needed sense of readiness among faculty and students,” Antoine explained.

Marcos Rehberg, vice president,finance, Guardian Life of the Caribbean Ltd, noted that its partnership with UWI started in 2000 and the relationship is deeply rooted in developing and promoting academic excellence, with leadership and innovation in mind.

“We can agree that quality is a value that should not be compromised, as we provide a promise to deliver, whether it be education or life insurance. Managing these expectations, while navigating through a blended environment requires a paradigm shift and agility in order to remain relevant.”

Dr LeRoy Hill, CETL director, spoke on the “ongoing rhythm of conversations that begs us to pause, reflect and take special notice of how we go about ensuring quality teaching and learning.” The theme, he said, “Ready, set, click: Negotiating quality in the blended/online teaching and learning environment is an invitation to be ready-to be resilient; resilient in the face of uncertainty or adversity.”

Feature speaker Dr Camille Dickson-Deane, senior lecturer, higher education learning design, at the University of Technology in Sydney. Australia, shared her research on the sociotechnical spaces in field of learning, teaching, and performance.

The panel of independent judges included Dr Dale Roy former executive director, Centre for Leadership in Learning, McMaster University; Prof Marc Tennant, director and founder, International Research Collaborative – Oral Health and Equity at the University of Western Australia; and Dr Suzanne Le-May Sheffield, executive director (acting) of the Centre for Learning and Teaching at Dalhousie University.

AWARDEES:-

Dr Bephyer Parey, post-doctoral, Sir Arthur Lewis Institute of Social and Economic Studies (SALISES)

Parey, a junior research fellow at the SALISES, has been teaching at UWI since 2008 and currently lectures on research design and statistical analysis. She has a track record of high-quality international publications and regularly disseminates her research to various audiences.

Parey serves on departmental, faculty, and One-UWI committees. She chairs the SALISES Disability Studies Research Cluster, which is responsible for operationalising an MOUbetween UWI and the Equal Opportunity Commission.

Dr Amy Deacon, lecturer, Life Sciences, Faculty of Science and Technology

Deacon joined the Faculty of Science and Technology in 2016. She is a graduate of the universities of Oxford (BA), Bangor (MSc), and St Andrew’s (PhD), and earned her certificate in university teaching and learning at UWI in 2017.

Deacon’s research centres on aquatic biodiversity, invasive species and Trinidad’s most famous fish: the guppy.

She is passionate about all the courses she teaches, spanning level 1 to MSc. Alongside publishing in biology, Deacon has contributed to pedagogical research, applying reflective practice to ecological fieldwork and examining the role of tertiary institutions in building conservation capacity in the Caribbean.

She is also a proud co-organiser of TT’s annual Bioblitz, which engages both students and communities in valuable biodiversity surveys.

Dr Suzanne Burke, head of department, Literary, Cultural and Communication Studies, Faculty of Humanities and Education

Burke was formally trained in psychology (BA,York University, Canada), development studies (MA, magna cum laude,ISS, The Netherlands), sociology (PhD, Essex University, UK) and education practice (Essex University, UK).

Her main academic concern is exploring the domain of culture as a vehicle for social and economic insight and transformation. Her research focuses on Caribbean industries in culture, creative entrepreneurship, cultural policy formulation and cultural practice-based pedagogies.

She has worked extensively with a wide cross-section of public-sector enterprises, civil society organisations and private agencies in the areas of strategic planning, human-resource development, policy analysis, cultural-sector mapping and planning, and audience research within and outside of the Caribbean. This research was the focus of her award of a Commonwealth Fellowship at City University, London in 2016. In 2017-18, she was part of the technical working group that helped formulate the only cabinet-approved National Cultural Policy of TT.

 

 

Lakshmi Girls

Lakshmi Girls’ Hindu College resumed its much anticipated annual science fair after a two-year hiatus because of the pandemic.

The Science Department at the college co-ordinated a highly successful and educational competition on the theme, “Securing our future and healing the Earth through Food Sustainability.”

There was enthusiastic participation by students in the investigation and research-based projects on soil health, food preservation and agro processing, chocolate making, honey making, and preventing lifestyle diseases, to name a few.

In the creative category students created food art and grow boxes using anything but a plant pot.

The innovations category was well patronised with students creating non-traditional food products, food waste management technologies, and skin care products from medicinal plants.

A water irrigation system was a project by students Sharda Ramkhalawan and Chloe Pierre.
The science fair culminated with trophies and medals being awarded to students who won in the various categories.

The Science Department at the school continued its strong tradition with this year’s science fair and the students enjoyed a day of creativity, innovation and fun.

ECO is a patron of local schools, providing science publications and assisting students.

 

 

National Geographic visit

Sep 29 2022

The Winston Nanan Caroni Bird Sanctuary’s vast biodiversity and pristine environmental conditions captured the attention of Lindblad Expeditions and National Geographic Explorers.

The 48-member group visit Yerette (home of the hummingbird) in Maracas, St Joseph, Hacienda Jacana in Talparo, the Central Experience and the Caroni Bird Sanctuary.  The explorers were taken through a three-hour long birdwatching journey by Nanan’s Caroni Bird Sanctuary Tours, a third-generation business now run by Allister Nanan.

They also run specialised expedition tours in Trinidad with birdwatching companies from across the globe.  While the media and explorers were only treated to viewing a portion of the 12,000-acre swamp, tour guides Nanan and Khemraj used their whistling, attracting the presence of a handful of the hundreds of species of birds that call the Bird Sanctuary their home.

The explorers, some in their twilight years, were treated to the sights of a red, white and black masked cardinal, which is on this country’s $50 bill, as well as multiple species of herons, the pygmy kingfisher, which is one of four species of kingfisher in the sanctuary, swallows, hawks, as well as a tropical screech owl nestled far away from the river paths.
The group also spotted the multiple silky anteaters and some of the crabs that fed on the lengthy mangrove tree roots.

The star of the show remained the evening arrival of the national bird, the Scarlet Ibis, sweeping in through the twilight skies.

Sherma Mitchell, of Tourism Trinidad, spoke to Explorer leader Lucho Vendesto during the tour. Verdesoto said, “The whole point of coming to Trinidad is actually to show our guests this incredible environment, this pristine ecosystem that you have. This is a spectacle that you don’t get to see many places in the world. It is pretty much unique. This is what we want to see. We want to see things that are being protected, and people care about these places.”

National Geographic Explorer documentary filmmaker and Colombian biologist Federico Pardo echoed his colleague’s sentiments, saying: “Thus far, I’m impressed. Not only by the warmth of the people but the diversity of the people. I was not expecting to see such a mix which makes it very appealing but also, it’s a Latin American country with great biodiversity.”

Lindblad Expeditions-National Geographic left T&T on a world-class expedition ship, heading to Guyana, Suriname, French Guiana, and Brazil.

Carla Cupid, the interim chief executive officer of Tourism Trinidad, welcomed the visitors.

“From all reports, the international explorers were captivated by our amazing flora, fauna, and unmatched biodiversity. Trinidad continues to be an ideal destination for ecotourism and outdoor adventures, and we remain committed to attracting visitors from all corners of the globe to showcase our biodiversity and develop authentic and memorable experiences. Today’s visitors are looking for engaging and enriching travel with strong storytelling and immersive experiences, and Trinidad offers that and so much more.”

She commended Nanan’s Bird Sanctuary Tours, which was the official tour operator for the Lindblad Expeditions-National Geographic, for their continued partnership with the group and “for their resilience and innovation in developing unique tour offerings that international visitors can place on their Trinidad bucket list.”

 

 

Obituary : Gordon Deane

Oct 21 2022

Atlantic stated Deane had been ailing for some time.  He served as Atlantic’s Chairman from October 2006 to December 2019, in the process becoming the longest-serving Chairman of Atlantic.

Atlantic said Deane, “steadfastly guided our Board of Directors in this role, but was well-known to all given his presence, interaction, and genuine interest in the well-being of all levels of staff on the Atlantic team. Atlantic was privileged to have the benefit of his business experience.

“The company expresses our deepest condolences, and our hearts and prayers are with his family. May they find solace and comfort in this time of grief.”

Former Energy Minister Kevin Ramnarine paid tribute to Deane .
“I was very saddened to learn of the passing of Gordon Deane. Gordon was the Chairman of Atlantic during the years I served as Energy Minister. For many years he was a steady presence at the helm of an important and complex entity like Atlantic. He also brought a lot of his wisdom and patience to that role. In that role, he became the elder Statesman of the Energy sector. We shared a good relationship which continued after I left office. Trinidad and Tobago has lost a great man and a patriot. May he Rest in Peace.”