Venezuelan Natural Gas

JACOB DICK, NGI
October 19, 2023

Trinidad and Tobago aims to take a “significant step forward” in gathering Venezuelan natural gas to support domestic demand and LNG exports after the US granted an amended licence

The Energy Ministry expects to complete negotiations with Venezuela to buy natural gas from the offshore Dragon field after the U.S. Treasury Department agreed to allow development partners to make payments in hard currency and humanitarian contributions.

The Energy minister plans to continue meetings with Shell plc, Trinidad’s state-owned National Gas Co. and the government of Venezuela to “get into the granular level of detail” for pricing Dragon field gas.

“Very shortly, I will lead a team back to Venezuela to finalize those arrangements.”

While the ministry is still coordinating with Shell’s engineers and procuring further regulatory approvals, gas could potentially be introduced to the Shell Hibiscus offshore platform in less than two years once “given all the green lights.”

The US initially granted Trinidad a development licence earlier in the year. However, limitations on the kind of payments countries are allowed to make to Venezuela stymied negotiations.

In May, Trinidad formally asked U.S. officials to change licence terms.

The amendment extends Trinidad’s development licence to Oct. 31, 2025.

State-owned Petróleos de Venezuela reported reserves of 4.2 Tcf have been found in the Dragon field, 11 miles offshore Trinidad, since development started over a decade ago. Ongoing geopolitical turmoil and sanctions against Venezuela prevented capital partners from joining the project.

Earlier in the week, Venezuela and the US were reported to be negotiating a deal for possible sanctions relief in exchange for Venezuela adopting electoral reforms.

Trinidad has been seeking available resources to supplement its maturing gas fields as production and liquefied natural gas exports from Atlantic LNG gradually fall. One of Atlantic LNG’s trains at the 15 million metric tons/year (mmty) site has been idle since 2020 because of insufficient feed gas supply.

The closure caused Trinidad’s LNG exports to decline, falling from 12.7 million tons (Mt) in 2019 to an all-time low of 6.3 Mt in 2021. Exports grew slightly last year to 7.9 Mt as Europe’s energy crisis spiked global prices for available LNG volumes. The global supplier of LNG delivers several cargoes a year to New England, especially during periods of high winter demand. Only two countries in the region, Peru and Trinidad, currently export LNG.

Shallow water bid round

2023, 10/05

Heritage CEO Erik Keskula and Minister of Energy Stuart Young, attended the launch of the 2023 Shallow Water Competitive Bid Round at International Waterfront Complex, Port-of-Spain.

The Ministry of Energy launched the 2023 Shallow Water Competitive Bid Round, by inviting bids for 13 blocks in marine areas of the north, south east and west coasts of Trinidad.

The bid round will be open for six months, with the deadline for submissions being April 2nd, 2024 at 12 noon. Government intends to announce successful bidders by August 2024, and expects to execute the Production Sharing Contracts (PSC) by September 2024.

The blocks are to be offered via PSC with the Minister’s share of profit petroleum and the minimum work obligations as biddable items.

The 13 blocks being offered are: Block 1(b), Block 2(ab), Block 2(d), Block 21, Block 22(a), Block 22(b), Block 4(c), Guayaguayare (Offshore) Block, Block Lower Reverse L, Block Modified U(c), Block NCMA 2, Block NCMA 3 and Block NCMA 4(a), located in the shallow water area off the coasts of Trinidad and Tobago.

Addressing the launch, Energy Minister Stuart Young said the total unrisked resource estimate of these blocks is approximately 13.4 trillion cubic feet. Unrisked oil and gas resources are derived from the arithmetic sum of individual prospects before the application of chance of geological success factor, according to a definition by Law Insider.

“The Shallow Water Competitive Bid Round 2023 demonstrates the government’s ongoing commitment to the further exploration and development of our hydrocarbon resources in a timely manner.”

Noting that the last Shallow Water Bid Round in 2018 had a disappointing outcome, the Energy Minister said as result, the Ministry conducted a series of stakeholder engagements and then embarked on an internal review of its bid round process as well as the fiscal terms and conditions. That review yielded the removal of pre-bid fees, reduced bid fees and the provision of favourable fiscal incentives.

Among incentives in the model PSC for the 13 blocks are fiscal stability via a ring-fenced production sharing contract and cost recovery up to 60 per cent. The Government is also required to pay taxes and royalties on behalf of the contractor out of the Government’s share of energy profits.

During the time that the bid round will be open, the Ministry of Energy plans to execute international promotions and roadshows showcasing Trinidad and Tobago’s shallow water acreage.

“I have also taken the opportunity to engage with some of the energy stakeholders with interests in Trinidad and Tobago – BP, Shell, EOG, Woodside, Touchtone and Perenco. All were receptive to our discussions and reaffirmed their commitment to continued activity in upstream operations in Trinidad and Tobago.”

Heritage

Heritage Petroleum Company Ltd provided an update about the state company.

The Energy Minister was briefed by Heritage officials at the Red House where he was in a meeting of the Standing Finance Committee of the House of Representatives on the 2023/2024 budget.

Chairman Michael Quamina, SC, reported on performance since its new CEO Erik Keskula joined Heritage earlier this year.

Keskula gave an update on the results of the recent offshore drilling programmes which yielded the largest Heritage producing well to date and ongoing asset integrity efforts. He outlined plans for 2024 including drilling projections, joint ventures, lease operator programmes and high-grading.

The Minister reiterated the strategic importance of the SOC and the need to remain focused on ramping up production. The ministry remained committed to working cohesively with all energy sector stakeholders to ensure that TT can leverage a competitive position globally.

Yara earns US$93M in for operating Tringen

2023, 10/19

Trinidad Nitrogen Ltd, Tringen, the majority state-owned ammonia producer reimbursed its minority shareholder, Yara, a sum of $624.05 million (US$93.13 million) in the last three years for management and operation of two ammonia plants on the Point Lisas Industrial Estate.

Publicly listed National Enterprises Ltd (NEL) holds 51 per cent of Tringen. 49 per cent is owned by Yara Caribbean (2002) Ltd, which wholly owns Yara Trinidad, which contracted the management and operating agreement with Tringen, under which Tringen reimburses Yara Trinidad for all direct costs and 90 per cent of the total indirect costs incurred in fulfilling out its obligations, according to Tringen 2022 and 2021 financial statements. Ernst & Young Services Ltd (EY) conducted Tringen audits.

Before January 1, 2021, Tringen reimbursed Yara 66.67 per cent of its indirect costs. But effective January 1, 2021, Tringen agreed to amend the terms of the management and operations agreement to increase Yara’s reimbursement for indirect costs to 90 per cent. Tringen explained that Yara’s percentage reimbursement was increased from 66.67 per cent to 90 per cent because of the closure of the ammonia plants owned and operated entirely by Yara.

Costs are now divided between two plants and administration rather than three..
Yara’s wholly owned ammonia plant was closed on December 31, 2019 and the reimbursement was increased on January 1, 2021.

“This agreement also allows Yara Trinidad Ltd. to provide the services of its employees as it deems necessary for the management and operations of the company (Tringen),” according to note 1 of the EY audit.

Tringen’s reimbursement of Yara amounted to $258.385 million in 2022, $211.266 million in 2021 and $154.405 million in 2019–a total of $624.056 million.

The original management and operations agreement is dated May 6, 1976. The agreement has been updated since then, with the previous agreement expiring on December 31, 2018. The current agreement was renewed for a further five-year period beginning on January 1, 2019. The agreement expires on December 31, 2023 and is in the process of being renegotiated by NEL and Yara.

Asked why Yara, the 49 per cent minority shareholder of Tringen, gets reimbursed under the management and operating agreement, president of Yara Trinidad, Treveno Mowassie said:

“The reimbursements indicated in the Ernst & Young report are related to the costs incurred by Yara Trinidad Ltd for operating and maintaining the Tringen plants and related infrastructure as well as administrative cost functions necessary for the Tringen business. These are reimbursed at cost. The board of directors of Tringen approves a budget for operating expenses as part of the annual business planning process and approves the audited financial statements. Financial statements are audited annually by independent external auditors both within Trinidad and internationally.

Yara Trinidad has approximately 180 employees.
By agreement, the Tringen board has six directors: three directors representing the interests of NEL and three representing the interests of Yara. The current chair of Tringen is Ingrid Lashley, who also chairs the NEL board. The Tringen chair does not have a casting vote, which suggests the board can only take decisions if there is consensus.

Tringen’s annus mirabilis
Last year was a record year for Tringen. The ammonia producer’s gross revenue in 2022 totalled $5.40 billion (US$806 million), a 66.44 per cent increase compared to the $3.24 billion (US$484.47 million) it generated in 2021 in 2022. The sharp increase in revenue earned by Tringen in 2022 resulted from the fact that anhydrous ammonia prices achieved record highs in nominal terms for the year, peaking at over US$1,600 a tonne. The escalation in ammonia prices was primarily a result of the invasion of Ukraine and the value chain disruptions that followed the end of the COVID-19 pandemic.

Tringen’s after-tax profit rose by 56 per cent to $1.45 billion (US$217.16 million), compared to the $933.46 million (US$139.32 million) the company declared in 2021.

Last year, Tringen paid dividends of $855.96 million (US$127.75 million) to its two shareholder–NEL and Yara. In 2022, NEL received $436.54 million (US$65.15 million), comprising the final dividend for 2021 and the interim dividend for 2022. Yara Caribbean (2000) Ltd received $419.42 million (US$62.6 million).

Tringen paid out 58.80 per cent of its 2022 after-tax profit as a dividend. As at the end of December 2022, the company had $1.93 billion (US$288.35 million) in retained earnings.
NEL received $380.81 million in dividend income for the nine-month period ended June 30, 2023. The investment holding company made three dividend payments totalling $0.50 to its shareholders. With issued share capital of 600,000,641 shares, NEL’s total dividend payments to its shareholders in its 2023 financial year, so far, was $300,000,320. NEL’s main shareholders are Corporation Sole (Minister of Finance) with 66.05 per cent and the National Gas Company with 16.67 per cent. NGC is 100 per cent owned by Corporation Sole.

According to the Ministry of Energy website, the annual capacity of Tringen I, which was commissioned in 1977, is 500,000 tonnes. Commissioned in 1988, the annual capacity of Tringen II is 495,000 tonnes. Total annual capacity of the two Tringen plants is 995,000 tonnes

In 2022, total production of both Tringen I and II was 750,781 tonnes, which means the two ammonia plants produced 75.45 per cent of their annual capacity last year, according to data on the Ministry of Energy website.
Tringen I and II exported 727,186 metric tonnes of ammonia in 2022, which is 96.85 per cent of the company’s production in 2022.

“All production from Tringen I and II is sold through sales agency agreements, with a related party, on the open market,” according to the EY audit.

In 2022, Tringen sold ammonia worth $2.75 billion (US$410.44 million) through Yara Switzerland and $2.64 billion (US$394 million) through Yara Ammonia Inc. That means in 2022 a total of $5.40 billion (US$806.26 million) was sold through related parties of Yara Trinidad, on the open market, in accordance with the sales agency agreement.

Asked what percentage of the ammonia produced by Tringen is sold to related parties of Yara, Mowassie said: “Tringen ammonia is sold for the best available market price anywhere in the world, and as a result, the percentage sold to Yara-related parties varies widely. Pricing is based on independent international market publications.”

With power from Europe’s largest hydropower plant in Norway,. the world’s first industrial nitrogen fertilizer production began in 1907 at Norsk Hydro, funded by capital from the Wallenbergs in Sweden. Demerged as Yara International ASA in 2004, Norsk Hydro pioneered petroleum exploration and merged with Statoil, now Equinor.

The Point Lisas site has a rich history that extends to the first petrochemical plant in 1964. A joint venture with Tringen was established in 1977 with the construction of the Tringen I plant, expanded in 1988 with the Tringen II plant. Acquiring the interests of the previous operator in 1991, Hydro Agri was divested into Yara in 2004, operated the ammonia plants on the Point Lisas site through Yara Trinidad Ltd and forged a long-standing relationship with Tringen as the manager and operator.

Yara Trinidad Ltd optimized Tringen’s business performance through access to world-class safety practices and policies specific to the industry, technical resources through international communities of practice, and a global view of business analytics.

As the largest trader of ammonia globally, Access to world markets brings both commercial advantages and stable markets for Tringen’s product through the cyclic commercial nature of the business.

This has been demonstrated recently with both a record year of ammonia prices in 2022 reaching the unheard-of level of US$1,625 per tonne due to war in Ukraine while in 2023 navigating through hugely different market conditions, with ammonia prices as low as US$285 per tonne.

Source: Treveno Mowassie

NGC & Methanex sign gas-sale agreement

October 12

On October 12, The National Gas Company of Ttinidad and Tobago Ltd (NGC) signed a new gas sales contract (GSC) with Methanex Trinidad Ltd (Methanex) – the largest producer and supplier of methanol – for the supply of gas to the Titan methanol plant on the Point Lisas Industrial Estate.

NGC said this GSC marks the successful conclusion of many months of negotiation and will allow the resumption of operations at the world-scale Titan plant, which was idled during the pandemic.

“Given Titan’s methanol production capacity of 875,000 metric tonnes per annum, the 2024 scheduled restart of the plant is good news for TT,” NGC said.

NGC president Mark Loquan said, “We have been working tirelessly with our stakeholders across the value chain to secure gas supply and satisfy demand, against the backdrop of maturing energy reserves and an evolving market. Throughout the process, our goal has always been to maximise value for all players in this challenging environment while seeking the interest of TT.”

With this GSC, NGC has managed to align and achieve those objectives.

Methanex president and CEO Rich Sumner thanked NGC for its professionalism during the negotiations and reaffirmed its commitment to working with NGC to secure an economic long-term gas supply.

“I am proud of our team’s effort to reach an agreement with the NGC that allows us to preserve this strategic location in our global portfolio and maintain a world-class team.”

Methanex announced its intention to idle the operations of its Atlas methanol plant in September 2024 on the basis of economic considerations. The timeframe for idling the plant coincides with the expiration of its current natural-gas contract.

NGC, Point Lisas Nitrogen sign gas-sales contract

The National Gas Company of Trinidad and Tobago Ltd (NGC) concluded negotiations for a gas sales contract (GSC) to govern the sale of natural gas to Point Lisas Nitrogen Ltd (PLNL). NGC said this GSC represents a critical step forward for both companies after fruitful negotiations.

“The execution of this GSC signals the commitment of both parties for the supply of gas under mutually agreeable terms to facilitate the continued operations of the PLNL plant, which produces anhydrous ammonia at its world-class production facility on the Point Lisas Industrial Estate.”

NGC president Mark Loquan said the company is keenly aware of its responsibilities in the domestic energy landscape, both as a gas supplier to the downstream sector and as the state entity charged with creating value for the country from TT’s natural gas resources.

“Achieving the right balance and ensuring we can satisfy the demands of all our stakeholders requires open discussion, flexibility and a constant focus on the big picture. I wish to thank the teams at PLNL and NGC for their equal dedication to the process and the achievement of a favourable outcome. We look forward to nurturing this relationship for a sustainable domestic energy sector future.”

Commenting on the significance of the GSC, PLNL president Fitzroy Harewood welcomed the timely execution of the contract, which represents a new chapter in the life of the company.

“As a downstream operator with a long-standing presence on the Point Lisas Industrial Estate, this opportunity to continue operations is testimony to the hard work and dedicated efforts of PLNL’s employees over the years. On behalf of PLNL, I extend thanks to the team at NGC for their professionalism and flexibility throughout these negotiations and we look forward to continuing this collaboration in the years ahead.”

Analysis of Dragon deal
Extension of the licence issued by the US Office of Foreign Assets Control (OFAC) for Trinidad and Tobago to exploit natural gas from Dragon field in Venezuela and the ability to pay for it in different ways was welcomed by optimism and advice for Government to seize this opportunity.

Energy Minister Stuart Young announced the extension of the licence to October 31, 2025, at a news conference at the Port of Spain International Waterfront Centre on Tuesday. The extension for a further two years gives Government “more than enough time for us to get done what needs to get done.”

The original OFAC licence to TT was granted in January. Young said the extension also allows Government to pay for gas from the field in “fiat currency, as well as US dollars, as well as (Venezuelan bolivares), as well as via humanitarian measures.”

Former UNC minister Vasant Bharath praised Young, his ministry, Shell and the National Gas Company (NGC) for this development. He said this project has been stalled for decades as a result of lack of capital, partners and US sanctions against Venezuela. It is no secret that for the last decade, insufficient feedstock of natural gas hampered operations of many companies at the Point Lisas Industrial Estate.

In this context, extension of the OFAC licence “presents a much-needed kiss of life to operators in Point Lisas as well as TT’s ability to attract new FDI (foreign direct investment).”

Widening of the agreement to allow different ways to pay for the gas is a welcome sign that the US is continuing efforts to bolster supplies in the global energy market, which remains disrupted by the invasion of Ukraine. He wanted to see details of the financial arrangements for the project, including profit-sharing.

Bharath said this is important “particularly, in light of the fact that PDVSA (Venezuela’s state energy company) has been crippled for decades with sanctions, lack of investment, loss of skilled labour, corruption and mismanagement.”

Former UNC minister of energy Kevin Ramnarine said it could take a minimum of two years to access the first gas from Dragon., according to conversations with experts in TT and Venezuela,

“A question mark hangs on the status of the wells that were drilled in the Dragon field almost 14 years ago and what infrastructure would be required to produce the natural gas and handle the associated liquids.”

Ramnarine said the public should be told what the total capital expenditure for the project is, who will fund it and “what money the NGC would be required to put out.”

He emphasised the importance of timelines. Shell was awarded front-end engineering and design contracts for the Manatee field for the first quarter of 2023, with the first gas from Manatee in the first quarter of 2028.

“These timelines are indicative of the technical and engineering realities of these projects.”

While a lot of commercial and technical work needs to be done, Ramnarine said, “I think two years is optimistic.”

This optimism “is based on a political deliverable given the encroachment of the next TT general election (in 2025).

Analyst Gregory McGuire said, “It’s positive news. Prospects for an investment decision look better. The timeframe is still very tight and much still depends on the path of Venezuela in pursuing a solution to its political crisis.”

The US government had previously said it would consider easing restrictions on Venezuela if President Nicolas Maduro, allowed free and fair elections.

The Associated Press (AP) reported that Venezuela’s government and a faction of its opposition agreed formally to work together to “reach a series of basic conditions for the next presidential election, including scheduling the contest for the second half of 2024.”

UWI economist Dr Vaalmiki Arjoon said once Dragon gas can be monetised and exported, “this can be the start of a new era for further cross-border energy partnerships between Trinidad and Venezuela and even other South American economies. Our gas production has declined by 36 per cent in the last decade and currently stands at approximately 2.5 bcf (billion cubic feet) per day.”

Apart from supplementing domestic gas production, Arjoon said the success of the Dragon gas deal may open doors to other opportunities in Venezuela.

“Venezuela boasts the ninth largest gas reserves globally, standing at 203 trillion cubic feet (tcf), yet it’s not an exporter.”

Arjoon said Maduro is actively working to change this as shown by granting gas export licences to Repsol and Eni SPA.

“Venezuelan law allows international companies to invest independently in the natural-gas sector, without requiring partnership with PDVSA.”

Arjoon believed Maduro would prefer US-dollar payments for Venezuela’s share in the Dragon gas deal “given their substantial need for US-dollar investments to rejuvenate their petroleum infrastructure.”

He said that expenditure could range from US$110-$250 billion, despite recent investments from Russia, China and Iran.

He suggested Venezuelan gas should be looked at as one part of TT’s hydrocarbon equation. The other part should be continued adjustments to the fiscal strategy to incentivise energy companies to make added local investments.

“An enhanced fiscal strategy can ensure greater success in future bid rounds.”

Greater San Fernando Chamber of Commerce president Kiran Singh said, “This announcement will bring back some level of confidence to the energy sector, which has been languishing for some time.”

The domestic petrochemical sector, “will benefit tremendously from a new gas inflow. The payment for the new supply via cash or humanitarian means will encourage a steady flow for the medium term.”

The Dragon gas deal can play an important role in TT’s economic diversification.

“It will also buy us much-needed time to prepare for the incoming revenue stream and to enable the diversification process.”

Amcham was optimistic that “this latest development will lead to several opportunities for our energy sector.”

Amcham promised to continue to support these efforts through its engagement with various arms of the US government and private sector.

“We also take note of and welcome recent Caricom-supported agreements that could lead to the strengthening of Venezuela’s democracy and, ultimately, full reintegration into hemispheric systems.”

Confederation of Regional Business Chambers said, “It’s a major step in the right direction as US payments were probably the biggest hurdle.”

CRBC acknowledged there remains a lot of regulatory and commercial work to do by both TT and Venezuela to ensure the success of the project.

CRBC wished Government “every success in this Dragon Gas field project and looks forward to a brighter outlook for Trinidad and Tobago due to their strategic efforts.”

Dragon debate

2023, 10/10

UNC MP David Lee has called on the Government to say if the Venezuelan government has lumped the Dragon Gas agreement into one with the Loran Manatee field project.

In his contribution to Monday’s 2024 Budget debate in Parliament, Lee asked for details of the Dragon Field agreement signed recently.

“Did they sign when we’ll be getting first gas? When are we starting operations? Did they agree T&T won’t have to pay cash to the Venezuelan government?” he asked.

Lee sought clarification on whether Venezuela asked for a pipeline from the Dragon field to Guiria on the Venezuelan side and to run a pipeline to Atlantic LNG in Point Fortin.

“I don’t know but I was told…and that becomes a negotiating item. If that’s so, you understand what goes in Venezuela: every Monday morning they could turn off that pipeline from Guiria and our money will be jumping up,” he said.

Lee also said it appears the Venezuelans want to lump the Dragon Field and Loran Manatee fields into one.

“I understand President (Nicolas) Maduro is asking T&T to reconsider that whole Loran Manatee development and if you listened to the Energy Minister in debate, he mentioned something to that effect but (didn’t give details),” Lee added, calling for clarification.

Lee, who denied Energy Minister Stuart Young’s claims of PP government mismanagement and lack of action on the energy sector, said Young repeated much of what he usually says in debates. He said Government hadn’t moved the sector in eight years and not increased oil or gas production, but there was a lot of focus on “negotiating” contracts and claims.”

Lee said current plans will only produce way ahead. He said the Review of the Economy 2024 painted a grim picture of T&T’s realities and called on Young to give assurance that the Petrotrin retirees ‘pension plan – which needs $200m – will be saved

Lee said Finance Minister Colm Imbert’s Budget was “lacklustre, lacking sound policies to stimulate the economy, failed to meet the population’s needs and was absent of any policy to drive national development.”

Lee, who denied Young’s claim of the Opposition lacking patriotism, said he loved his country.

Argus

18 October 2023

Trinidad and Tobago expects to receive natural gas from Venezuela’s offshore Dragon field within two years as the US will allow payment in cash for the fuel, energy minister Stuart Young said. The US Office of Foreign Assets Control (Ofac) had extended the license for Trinidad to discuss trading gas with Venezuela to 31 October 2025, and the latest amendment allows for easier payment options without violating US sanctions. The original license for a gas sales agreement was granted in January 2023, but both countries had criticized conditions that prevented cash payments.

The project involves Venezuelan SOC PdV and Shell — which would operate the Dragon project — and Trinidad state gas company NGC.

The initial plan was for Trinidad to purchase 150mn cf/d of gas from Dragon to be transported through a pipeline to a Shell platform in Trinidad. Young gave no details about the volumes to be imported from the field nor when work on the project would begin.

Negotiations for Trinidad to purchase gas from the field were halted in 2020 by extensive US sanctions targeting Venezuela. The amendment to the license by Ofac is “significant” and “is more than enough time for us to get done what needs to get done.”

The changed conditions will allow Trinidad, Shell and NGC to negotiate all agreements with Venezuela and PdV to develop the Dragon project.

“It allows us to pay in fiat currency, as well as US dollars, Venezuelan bolivars, and humanitarian aid — which is what was envisaged initially,. There are no restrictions on the amount of US dollars which could be used to pay Venezuela.”

Dragon is part of Venezuela’s 14.7 Tcf Mariscal Sucre complex that also includes the Patao, Mejillones and Rio Caribe fields.

Trinidad needs additional gas as its flow has been recovering since November 2017, following a long slide from a peak of 4.3 Bcf/d in 2010. The fall in output has affected production of LNG, petrochemicals and fertilizers. Trinidad produced 2.57 Bcf/d of natural gas in June, an 11pc drop from May.

The amendment comes as Venezuela’s government and an opposition coalition signed two agreements yesterday toward expanding election rights, a condition that the US has set for further easing oil sanctions on the South American country.

USA allows payment for Dragon Gas

2023, 10/18

The United States granted additional time to further explore and develop the Dragon Gas Field exploration agreement with Venezuela and, more importantly, can now pay for the arrangement in US, Bolivars or Fiat currency.

Announcing the latest developments to media briefing at the Ministry of Energy in Port-of-Spain, Minister Stuart Young said it was done via the granting of a “significant amendment to our OFAC licence”.

The good news had been communicated to him around midday via their lawyers in Washington, following which Prime Minister Dr Keith Rowley, in Canada for the first Canada-Caricom Summit, was immediately apprised; along with Venezuela Vice President Delcy Rodriguez.

Young said, “The US government has issued, through the Treasury Department, OFAC, to the Government of T&T, an amendment to the licence that we had requested, in the terms that we have requested.”

The Office of Financial Assets Control (OFAC) continually maintains a number of sanctions lists on behalf of the United States Department of Treasury.
T&T’s amended licence will now run for two years until October 31, 2025. T&T had initially been granted a two-year licence to explore the gas field in Venezuelan waters, in January.

Amendment to the licence would provide T&T with “more than enough time for us to get done what needs to get done”.

He did not reveal details associated with the project due to confidentiality clauses, but noted, “It also allows the Government of T&T, working along with NGC and Shell, to complete negotiations and all agreements with the government of Venezuela and PDVSA for the development and the production, and the export of that gas from the Dragon Gas Field into T&T for us to develop it, and make payments in Fiat currency, as well as US dollars, as well as Bolivars, as well as via humanitarian measures, which was what was envisaged initially. That OFAC licence now is a full green light for us to be able to do what needs to be done.”

T&T continues to engage Venezuela and PDVSA via virtual meetings as they work out the “granular level of detail for the pricing and for the development of the gas for Dragon”.

He will soon be leading a team back to Venezuela to finalise arrangements, as it was not over yet. In addition to working out the commercial terms, they were also working out the technical terms with Shell’s engineers on how quickly the gas could be brought to T&T for processing.

T&T had been one of the first countries to receive a significant OFAC licence to be able to pursue the Dragon Gas Field.

Asked how soon T&T could realise a return on this investment, he said, “There’s still a few hurdles that we have to get across. If we had all of the green lights to press go from today, meaning all of the approvals, all of the agreements in place…the bringing of the gas to the Hibiscus platform could be done in less than two years.”

T&T and Venezuela signed the agreement to jointly explore the Dragon Gas Field last month. Young and Venezuela’s Oil Minister Pedro Tellechea signed the agreement on September 9 at Miraflores, official residence of Venezuelan President Nicolas Maduro.

In January, US President Joe Biden granted T&T a waiver on 2019 Venezuelan sanctions, allowing the Dragon deal negotiations to go forward.

Fiat money is a government-issued currency that is not backed by a commodity such as gold. Fiat money gives central banks greater control over the economy because they can control how much money is printed. Most modern paper currencies, such as the U.S. dollar, are fiat currencies. One danger of fiat money is that governments can print too much of it, resulting in hyperinflation.

New Woodside Energy president

Energy Minister Stuart Young met Kellyanne Lochan, new president and country chair of Woodside Energy, at the Red House. Lochan updated Young on Woodside Energy assets in TT and reiterated the company’s commitment to developing local hydrocarbon resources.

Young discussed natural gas production at Angostura field and the Calypso project deep-water gas resource. The government is prepared to work with all energy stakeholders to drive investments towards continued oil and gas production and to explore further development of TT resources. The two parties agreed to keep communications open and a team of Woodside Energy representatives will meet ministry officials in the coming months.

2024 Budget

https://www.finance.gov.tt/2023/09/07/national-budget-2024-building-capacity-for-diversification-and-growth/

Review of the Economy 2023

PETROLEUM
Overview:

The CSO reported a marginal expansion in real economic output in the Petroleum Sector between January and March 2023. This was an extension of the slightly higher growth registered in the final quarter of 2022.

The sector’s performance during the first three months of 2023 was driven by increased real economic activity in Natural Gas Exploration and Extraction, Petroleum and Natural Gas Distribution, Petroleum Support Services and Asphalt, ultimately slightly outweighing the reported contractions in the other industries.

Additional output during the quarter from energy projects that commenced production in 2022, was integral in counteracting both the adverse effects of the natural rate of decline in output as well as production disruptions experienced by local petroleum companies, thus leading to economic growth in the sector.

.January to March 2023 Based on the CSO’s latest available quarterly estimates of constant price GDP, the Petroleum Sector recorded an expansion of 0.3 percent during the first quarter of 2023, subsequent to a marginally higher 0.4 percent increase in the preceding fourth quarter of 2022.

Positive outturns in four (4) petroleum industries offset the declines registered in the remaining four (4) industries during the three-month period ended March 2023 (Appendix 2).

Real output in the Manufacture of Petrochemicals industry, the leading Petroleum Sector contributor to Real GDP, decreased by 3.5 percent during the January to March 2023 period, representing a deeper contraction than the 2.1 percent economic decline recorded in the final quarter of 2022. Increased downtime at several petrochemical plants was a major contributing factor to the industry’s negative outturn during the quarter ended March 2023.

Notably, the Nutrien Trinidad (Nutrien) urea plant was offline during February and March 2023 as a result of planned outages, whereas the melamine production facility was offline during the same period due to unplanned outages.

The Manufacture of Petrochemicals industry was also impacted by a reduction in the supply of natural gas to the plants and the continued absence of output from the Nutrien 03 ammonia plant, which was idled indefinitely in August 2022 and remained offline during the first three months of 2023.

Conversely, the second largest Petroleum Sector contributor to Real GDP; the Natural Gas Exploration and Extraction industry, registered economic growth of 1.7 percent during the three-month period ended March 2023, following a 4.0 percent expansion in the October to December 2022 period.

Additional production from natural gas projects which came online in 2022 was the primary driver of the industry’s improved economic activity during the first quarter of 2023. These projects included Shell Trinidad and Tobago Limited’s (Shell) Review of the Economy 2023 50 P

Colibri project, which achieved first gas in early 2022 and Touchstone Exploration Trinidad Limited’s (Touchstone) Coho project, which came onstream in October 2022.

Consequent to the natural rate of decline in production and subdued oil prices, on account of weakened global economic conditions, real output in the Crude Oil Exploration and Extraction industry; the third leading Petroleum Sector contributor to Real GDP, fell by 4.5 percent during the first three months of 2023.

This was however an improvement from the downturn of 5.3 percent recorded during the final three months of 2022. On the other hand, the Petroleum and Natural Gas Distribution industry registered marginal growth of 0.4 percent during the first quarter of 2023, subsequent to a 1.7 percent increase in the previous quarter ended December 2022. The industry’s positive outturn is likely due to a small improvement in petroleum and natural gas sales and volumes during the 2023 period.

Notwithstanding the increase in output of liquefied natural gas (LNG) from the Atlantic LNG Company of Trinidad and Tobago (Atlantic), real economic activity within the Refining (incl. LNG) industry decreased by 1.0 percent during the January to March 2023 period. The industry’s reduction in output was preceded by growth of 1.9 percent in the final quarter of 2022.

During the three-month period ended March 2023, Atlantic’s higher outturn of LNG was outweighed by a contraction in the production of NGLs at Phoenix Park Gas Processors Limited (PPGPL). The reduced output of NGLs in the 2023 period was influenced by a fall in the supply of liquids from Atlantic and inlet gas to the PPGPL facility from upstream natural gas producers, as well as increased downtime at the facility.

Additionally, Condensate Extraction, which previously fell by 9.0 percent during the October to December 2022 period, recorded a slightly milder contraction of 8.2 percent during the first quarter of 2023. The industry’s constrained performance was due to lower production levels from several condensate producers, primarily as a result of the natural rate of output decline.

Petroleum Support Services however grew by a significant 139.5 percent during the first three months of 2023, as compared to the 49.0 percent expansion in the preceding fourth quarter of 2022.

Likewise, real output in the Asphalt industry, the smallest contributing petroleum industry, rose by a colossal 2,487.8 percent during the quarter ended March 2023, which was multiple times the massive 224.6 percent increase achieved in the final three months of 2022.

An upsurge in the initiation and acceleration of infrastructural development projects and road repair and improvement works resulted in increased demand for asphalt and related products. This spurred a significant expansion in economic activity during the first quarter of 2023.

The CSO has reviewed its methodology for assessing the Asphalt industry and has accordingly revised its annual Nominal and Real GDP estimates for the Asphalt industry for the period 2012 to 2021 (Text Box 2). Text Box 2:

Revision of Annual and Quarterly Asphalt Estimates by the CSO The methodology adopted for estimating the Asphalt industry prior to publishing the 2022 estimates utilised annual Trade data (imports and exports) as an indicator for the Annual series with the Quarterly series benchmarked to the Annual. The revisions to the Asphalt industry recorded in the 2022 estimates are due to methodological changes based on advice received from the Real Sector Advisor of the CARTAC during the CARTAC Mission undertaken in May 2023.

These methodological changes have resulted in a greater congruence between the Quarterly and Annual series. The revised methodology entails the construction of price and volume indices using data received from Lake Asphalt of Trinidad and Tobago (1978) Limited (Lake Asphalt).

The following highlights the impacts of the revisions made by the CSO to its Annual Asphalt data series: 2016 2017 2018 2019 2020 2021 Original Asphalt, Current Prices (TT$ Mn) 111.5 115.3 164.2 121.5 166.2 136.7 Revised Asphalt, Current Prices (TT$ Mn) 106.8 119.1 3.7 (3.3) (7.2) (5.0) Original Asphalt, Constant Prices (TT$ Mn) 177.1 173.9 247.7 183.3 250.7 206.3 Revised Asphalt, Constant Prices (TT$ Mn) 173.6 236.9 171.9 226.0 279.9 78.8 Original Asphalt Growth Rate (%) (22.1) (1.8) 42.5 (26.0) 36.8 (17.7) Revised Asphalt Growth Rate (%) (22.2) 36.5 (27.4) 31.5 23.8 (71.8) Source: Central Statistical Office

EXPLORATION AND EXTRACTION
Exploration and Development Activity
Trinidad and Tobago’s Energy Sector remains attractive to investors, as an estimated US$1.2 billion was invested in the upstream sector by oil and gas companies in 2022.

Foreign direct investments by these companies could potentially reach US$3.4 billion in calendar 2023. Moreover, an additional estimated US$1.3 billion is expected to be invested in calendar 2024. The Government has signaled its intention to maintain the momentum of exploration through improved fiscal incentives and the availability of acreage both on land and offshore.

Consequently, major oil and gas companies such as Heritage Petroleum Company Limited (Heritage), BP Trinidad and Tobago (BPTT), EOG Resources Trinidad Limited (EOG), Woodside Energy Group Ltd (Woodside) and Shell are committed to upstream activity in Trinidad and Tobago and are working towards undertaking projects geared towards replacing, as well as increasing production.
T

he last Crude Oil Audit was prepared by Netherland, Sewell and Associates Inc. (NSAI) for the year ended December 31, 2018. That Audit estimated Trinidad and Tobago’s proven and probable crude oil reserves at 220.1 million barrels and 99.7 million barrels, respectively.

A new Crude Oil Audit for year-end 2023 is expected to commence in calendar 2024. With respect to natural gas reserves; the year-end 2020 Ryder Scott Gas Audit reports that Trinidad and Tobago’s P1 + C1 Technically Recoverable Resources (TRR)19; formerly known as proved reserves; stood at 10.2 trillion cubic feet, while the P2 + C2 TRR (formerly known as probable reserves) was estimated at 7.2 trillion cubic feet.

Further to the year-end 2020 Gas Audit, year-end 2021 and year-end 2022 Gas Audits were conducted. The results of these Audits are expected to be released in calendar 2023.
Touchstone achieved first gas from its Coho-1 well in its Coho field in October 2022, representing the company’s first onshore natural gas project to come onstream in Trinidad and Tobago in over twenty years. With respect to Touchstone’s other facilities; following the completion and commissioning of the company’s Cascadura facility, first output was achieved from two (2) wells in the Cascadura field; (Cascadura-1ST1, with an estimated 20 million standard cubic feet of gas per day) in September 2023.

Furthermore, a combined 1,500 barrels per day of natural gas liquids is expected to be produced from these wells. In terms of development drilling, Touchstone spudded one (1) development well (Royston-1X) in the Ortoire Block in February 2023, in order to further evaluate the Herrera sands which were encountered in the original previously drilled Royston-1 well. The company is anticipated to start production from its Royston field in calendar 2023. Additionally, Touchstone also plans to drill two (2) development wells (Cascadura-2 and Cascadura-3) later in 2023. Output from these two (2) wells as well as the Coho-2 development well (with an initial rate of 10 million standard cubic feet per day) is projected to come online over the medium-term period.

BPTT commenced production from its Cassia C compression facility; the company’s first offshore compression platform and largest offshore facility, in November 2022. Peak output from Cassia C was estimated at approximately 200 to 300 million standard cubic feet per day. Between October 2022 and June 2023, BPTT also drilled four (4) development wells for its infill drilling programmes20 in the Mango field (three (3) development wells) and Savonette field (one (1) development well). First gas from the Mango field was achieved in the first quarter of calendar 2023 while production from the Savonette field commenced in the third quarter of calendar 2023. Output from BPTT’s other infill drilling progamme in the Angelin field is projected to come onstream later in 2023. The Angelin field will include three (3) wells, with an estimated average twelve-month total production of 200 million standard cubic feet per day.

The company’s other medium-term investment projects include the Cypre, Ginger and Coconut developments. The Cypre project will include seven (7) development wells and its output is expected to peak at 300 million standard cubic feet per day. The capital expenditure for this project is estimated at US$854 million.

Similar to fiscal 2022, Heritage accounted for the majority of development wells spudded during fiscal 2023. Heritage drilled six (6) onshore development wells and three (3) offshore development wells during the current review period. Additionally, twenty-four (24) development wells were spudded by the company’s Lease Out/Farmout (LO/FO) and Enhanced Production Service Contract (EPSC)21 operators during the first nine months of fiscal 2023.

Regarding exploration activity, one (1) offshore exploratory well was drilled in South East Soldado in February 2023, in which hydrocarbons were discovered. The well subsequently came onstream but was taken offline due to sand control issues. The company’s LO/FO and EPSC operators also spudded one (1) exploration well in June 2023.

Likewise, in October 2022, EOG drilled one (1) exploration well in the Osprey field. The company plans to further develop the Osprey field by drilling five (5) more wells (two (2) exploration wells and three (3) development wells) from its Osprey A platform to the west of Osprey. In terms of development projects, first output is anticipated from phases one (1) and two (2) of Osprey East in calendar 2023.

EOG’s projects in its South East Coast Consortium (SECC) Block and TSP-SMR (Mento) Block (a joint venture with BPTT) are projected to come online over the medium-term horizon. Twelve (12) wells are expected to be drilled and completed in the Mento Block. Moreover, Mento’s planned phase 1 and phase 2 production wells are estimated to produce a combined 225 million standard cubic feet of gas per day and 8,400 barrels of crude oil and condensate per day. Shell was the other upstream company to spud one (1) exploration well during the nine-month fiscal period ended June 2023. This well, (Aphrodite-2X) was drilled in Block 5A in November 2022, and resulted in the discovery of a commercial volume of natural gas. The company is currently contemplating development plans regarding this discovery. Moreover, output from Aphrodite-2; another of the company’s previously spudded wells, is projected to come onstream over the medium-term.

In terms of the Manatee field, Shell has submitted a field development plan for the project. The plan is expected to be approved in calendar 2023.

No drilling campaign was undertaken by Woodside during the October 2022 to June 2023 fiscal period. The company is, however, continuing its search for new drilling opportunities in the shallow water acreage (Blocks 2(c) and 3(a)), while pursuing the Calypso project in the deep water acreage (Blocks TTDAA14 and 23(a)).

Trinity Exploration and Production Ltd. (Trinity) also did not conduct any drilling activity during the first three quarters of fiscal 2023. The company has indicated its intent to submit a revised field development plan for the TGAL area, which would entail the drilling of new wells to drain oil reserves off the east coast of Trinidad.

In keeping with its mandate to make acreage available for exploration, the Ministry of Energy and Energy Industries (MEEI) continued its Competitive Bid Rounds campaign over the 2022 to 2023 period.

Regarding the 2021 Deep Water Competitive Bid Round, the Government of Trinidad and Tobago approved the award of three (3) deep water blocks to the Consortium of BP Exploration Operating Company and BG International Limited, a subsidiary of Shell, in September 2023. Additionally, the MEEI is engaged in ongoing negotiations with the Consortium to enhance the bid received for another block, having completed similar negotiations on the above-mentioned three (3) blocks.

Subsequent to the closure of the Deep Water Competitive Bid Round on June 02, 2022, the MEEI launched the 2022 Onshore and Nearshore Competitive Bid Round on July 08, 2022. At the close of the Bid Round on January 09, 2023, sixteen (16) bids were received for eight (8) blocks, out of the eleven (11) blocks made available for bidding. Following the evaluation process, preferred bidders were recommended for five (5) of the eight (8) blocks which received bids. The preparation of Exploration and Production Licenses for execution is ongoing. In terms of the remaining three (3) blocks, the MEEI commenced negotiations in August 2023, in an effort to improve the bids.

The 2023 Shallow Water Competitive Bid Round is expected to be launched in the fourth quarter of calendar 2023. A total of thirteen (13) blocks will be made available for bidding. In order to improve the attractiveness of this Bid Round, the MEEI conducted a comprehensive review of the Bid Round process, including the fiscal and legal terms. The MEEI also received feedback from stakeholders following the completion of the 2018 Shallow Water Competitive Bid Round. Several recommendations from these processes have been incorporated into the 2023 Shallow Water Competitive Bid Round.

Drilling: A total of forty-two (42) wells were spudded by petroleum companies operating in Trinidad and Tobago during the first three quarters of fiscal 2023, representing a notable 90.9 percent increase from the twenty-two (22) wells drilled in the corresponding period of the previous fiscal year.

Detailed by well type, the country recorded an expansion in the well count of both development22 and exploratory23 wells spudded during the October 2022 to June 2023 period. Whereas the number of development wells drilled doubled (from 19 to 38), the number of exploratory wells rose by 33.3 percent (from 3 to 4), in comparison to the similar period one year earlier (Appendix 7).

Increased drilling activity by Heritage, BPTT and Touchstone during the nine-month period ended June 2023 was the primary driver of the overall growth in the country’s spud rate. During the October 2022 to June 2023 period, Heritage’s LO/FO and EPSC operators cumulatively drilled twenty-five (25) wells; twenty-four (24) development wells and one (1) exploration well. Comparatively, the company’s LO/FO and EPSC operators would have spudded thirteen (13) wells, all of which were development wells, in the previous fiscal 2022 period. 22

A development well is drilled in a proven producing area for the production of oil or gas, with the intent to exploit it for maximum economic production and recovery of a reservoir’s known reserves. It is drilled to a depth that is likely to be productive, so as to maximize the chances of success. 23

An exploratory or ‘wildcat’ well is a well drilled to locate proven reserves of recoverable gas and oil in an unproven area (both onshore and offshore) with the intent to discover a new petroleum reservoir. Review of the Economy 2023 56

Subsequent to the closure of the Deep Water Competitive Bid Round on June 02, 2022, the MEEI launched the 2022 Onshore and Nearshore Competitive Bid Round on July 08, 2022. At the close of the Bid Round on January 09, 2023.

The LO/FO and EPSC operators’ improved drilling campaign was mainly attributable to the increase in activity following the discontinuation of the measures implemented to curb the spread of the COVID-19 virus, coupled with the rise in crude oil prices.

Similarly, the number of wells spudded by Heritage for its onshore and offshore operations increased during the first nine months of fiscal 2023. Six (6) development wells were drilled on land during the current review period, as part of the company’s campaign to bolster its onshore crude oil production levels; one (1) more than the five (5) development wells spudded in the comparative fiscal 2022 period.

Additionally, Heritage Offshore operators drilled four (4) wells off the south-west coast of Trinidad during the first three quarters of fiscal 2023; three (3) development wells and one (1) exploration well, subsequent to no drilling activity being conducted in the company’s marine acreages in the corresponding period one year earlier. The company spudded these three (3) development wells in an effort to boost its output of crude oil from offshore assets.

BPTT and Touchstone also contributed to the country’s improved spud rate during the October 2022 to June 2023 period. BPTT drilled four (4) development wells in fiscal 2023 for its infill drilling programme in the Mango and Savonette fields; three (3) wells in the Mango field and one (1) well in the Savonette field. Similarly, Touchstone spudded one (1) development well (Royston-1X) in the Ortoire Block during the current review period, in order to further evaluate the Herrera sands encountered in the original previously drilled Royston-1 well.

Conversely, no new wells were spudded by BPTT and Touchstone in the previous fiscal 2022 period. EOG’s well count remained constant across both current and previous fiscal periods. The company drilled one (1) exploratory well in its Osprey field during the nine-month fiscal period ended June 2023 and likewise spudded one (1) exploratory well in the Trinidad Northern Areas (TNA) Block in the similar period one year earlier.

Other upstream operators such as Woodside, Perenco Trinidad and Tobago (Perenco) and Trinity also maintained their fiscal 2022 spud rates during the first three quarters of fiscal 2023. These companies did not conduct any new drilling activities during the current and previous review periods.

The overall expansion in the total well count was slightly moderated by a reduction in the number of wells drilled by Shell and Denovo in fiscal 2023. Shell spudded one (1) exploratory well (Aphrodite-2X) in Block 5A during the first nine months of fiscal 2023, down from the two (2) exploratory wells (Ice-1 in Block 5C and Aphrodite-1 in Block 5A) drilled in the preceding fiscal 2022 period. Following the one (1) development well spudded by DeNovo in its Zandolie field in the October 2021 to June 2022 period, no new wells were drilled by the company during the fiscal period under review.

Mirroring the trend in the number of wells spudded, total depth drilled increased to 54.8 thousand metres during the first three quarters of fiscal 2023. This represented a 41.8 percent expansion from the 38.6 thousand metres drilled during the nine-month period ended June 2022. The rise in depth drilled was on account of increased drilling activity by Heritage, BPTT and Touchstone. Similar to the previous fiscal period, development drilling dominated, as 43.7 thousand metres (or 79.7 percent of total depth drilled) were drilled for this purpose, whereas 11.1 thousand metres (or 20.3 percent) were drilled for exploration activities (Figure 6).

The increase in drilling activity during October 2022 to June 2023 was reflected in both onshore and offshore drilling. Drilling on land rose from 22.2 thousand metres during the first nine months of fiscal 2022 to 35.2 thousand metres in the current period, a 59.1 percent upsurge. Likewise, drilling in marine acreages grew by 18.6 percent to 19.6 thousand metres, as compared to the 16.5 thousand metres drilled in the comparative period one year earlier.

Crude Oil and Condensate Extraction Update to July 2023:

The latest available information received from the MEEI just prior to publication of this document reflects data up to July 2023. According to the updated data received, total crude oil and condensate production amounted to2023 period. This represented a 5.9 percent decline in output compared to the similar period one year earlier. October 2022 to June 2023 Following a turnaround in the sector’s performance in fiscal 2021 and a further improvement in fiscal 2022, the country’s total output of crude oil and condensate slipped to 56,537 barrels per day during the first nine months of fiscal 2023. This represented a 5.4 percent decrease in output when compared to the 59,736 barrels produced per day in the similar period one year earlier. Ultimately, reduced output from several upstream companies such as Perenco, Woodside, BPTT, EOG, Touchstone and DeNovo outweighed increased production from major companies namely Heritage, Trinity and Shell.

Consequent to the natural rate of decline in production, output from Perenco, Woodside, BPTT, EOG, Touchstone and DeNovo contracted during the October 2022 to June 2023 period. Woodside’s crude oil output was also constrained by the company’s increased focus on the blow down of the gas caps24 in its Greater Angostura field during the fiscal 2023 period. Furthermore, the cessation of production from Block U(b) also contributed to EOG’s lower output of condensate, while water breakthrough in DeNovo’s major condensate producer well in its Iguana field partly influenced the company’s condensate outturn during the current review period.

An increase in Heritage’s land production, together with a boost in output from the company’s LO/FO and EPSC operators, counteracted the fall in the company’s offshore production during the first three quarters of fiscal 2023. Heritage’s output from onshore activities and LO/FO and EPSC operators grew by 2.7 percent and 8.2 percent respectively, as a result of additional production from new development well2023 period. This represented a 5.9 percent decline in output compared to the similar period one year earlier.

October 2022 to June 2023 Following a turnaround in the sector’s performance in fiscal 2021 and a further improvement in fiscal 2022, the country’s total output of crude oil and condensate slipped to 56,537 barrels per day during the first nine months of fiscal 2023. This represented a 5.4 percent decrease in output when compared to the 59,736 barrels produced per day in the similar period one year earlier. Ultimately, reduced output from several upstream companies such as Perenco, Woodside, BPTT, EOG,

Touchstone and DeNovo outweighed increased production from major companies namely Heritage, Trinity and Shell. Consequent to the natural rate of decline in production, output from Perenco, Woodside, BPTT, EOG, Touchstone and DeNovo contracted during the October 2022 to June 2023 period. Woodside’s crude oil output was also constrained by the company’s increased focus on the blow down of the gas caps24 in its Greater Angostura field during the fiscal 2023 period. Furthermore, the cessation of production from Block U(b) also contributed to EOG’s lower output of condensate, while water breakthrough in DeNovo’s major condensate producer well in its Iguana field partly influenced the company’s condensate outturn during the current review period.

The magnitude of the overall reduction in the country’s crude oil and condensate production during the nine month period ended June 2023 was slightly moderated by an expansion in crude oil output from Heritage. The company’s production rose by 1.3 percent, from an average of 34,639 barrels produced per day during the October 2021 to June 2022 period to an estimated 35,095 barrels per day in the comparative period of fiscal 2023. An increase in Heritage’s land production, together with a boost in output from the company’s LO/FO and EPSC operators, counteracted the fall in the company’s offshore production during the first three quarters of fiscal 2023.

Heritage’s output from onshore activities and LO/FO and EPSC operators grew by 2.7 percent and 8.2 percent respectively, as a result of additional production from new development wells being brought online during the period under review25. Workover operations on existing wells by FO operators also contributed to the company’s
.

Heritage’s overall output is expected to maintain its upward trajectory over the medium-term period, particularly as the company’s focus since its inception has been on maximizing returns from exploration and production activities. Furthermore, the notable improvement in Heritage’s development drilling programme during the current fiscal period is expected to positively impact the company’s output of crude oil. Heritage spudded a total of thirty-three (33) development wells over the nine-month fiscal period ended June 2023 when compared to the eighteen (18) such wells drilled in the corresponding period of fiscal 2022. Moreover, the MEEI has instructed Heritage to allow independent operators with an interest in engaging in LO/FO operations with Heritage, the available capital and the willingness to work, to undertake production activities on Heritage’s acreages, in an effort to at least maintain and thereafter increase production.

Trinity and Shell also contributed to mitigating the overall contraction in crude oil and condensate production during the October 2022 to June 2023 period. Crude oil output from Trinity was bolstered by improved well maintenance while Shell’s output of condensate rose on account of increased production from its Bounty development well. In light of the ongoing resilience in the demand for fossil fuels as a prime source of energy despite the global thrust toward renewable energy sources, major upstream oil companies, including Heritage, remain committed to planned and ongoing exploration and development projects in Trinidad and Tobago. Accordingly, the country’s total production of crude oil and condensate is anticipated to increase over the medium-term27.

Disaggregated by hydrocarbon type, the country recorded lower levels of output of both crude oil and condensate during the first nine months of fiscal 2023 when compared to the corresponding period one year earlier.

Crude oil production decreased by 4.9 percent to 50,708 barrels per day during the current review period, from the 53,306 barrels produced per day during the previous fiscal 2022 period. Similarly, condensate output averaging 25 Heritage spudded six (6) development wells on land while twenty-four (24) development wells were drilled by the company’s LO/FO and EPSC operators in fiscal 2023, in comparison to the five (5) onshore development wells spudded and the thirteen (13) development wells drilled by LO/FO and EPSC in the corresponding period one year earlier. 26 Three (3) offshore development wells were spudded by Heritage during the first three quarters of fiscal 2023, subsequent to no drilling activity being conducted in marine acreages in the previous comparative fiscal 2022 period. 27 Increases in output, primarily from Heritage Petroleum, EOG Resources and the Touchstone Ortoire Block are anticipated to boost the country’s total production of crude oil and condensate over the next few years. Review of the Economy 2023 60

Exploration and Extraction activities include the production of crude petroleum, the mining and extraction of oil, the production of natural gas and the recovery of hydrocarbon liquids. It refers to the overall activity of operating and developing oil and gas fields.

Technically Recoverable Resources (TRR) are those quantities of petroleum producible using currently available technology and industry practices, regardless of commercial considerations. Infill drilling refers to the drilling of additional development wells within a discovered and producing field. These additional development wells are used to further drain reserves from the field which are not able to be produced with the existing wells. The existing wells may be unable to drain these reserves due to the drainage radius of the existing well (extent of the reservoir drained by the well), faults (geological barriers to flow) or the location of reservoir being targeted. Heritage Petroleum Company Limited has renamed its sub-license from Incremental Production Service Contract to Enhanced Production

$8 billion 2023 budget deficit

Pointe-a-Pierre MP David Lee suggested an $8 billion deficit in the budget, Contrary to the Finance Minister’s assessment of a $3 billion deficit. Lee said Minister of Finance Colm Imbert, in his mid-year review, said TT would have a greater deficit than that suggested at the start of 2023, which was $6 billion.

“What happened to those expenditures that we came in this Parliament to approve, that extra $3.8 billion? Because all things being equal, we are supposed to have a deficit of about $6 billion for fiscal 2023. But the minister spoke about a deficit of $3 billion, which is 1.8 per cent of GDP, which is in the norm. There is some deception in these budget figures, My projected deficit for fiscal 2023 is supposed to be at least $8 billion.”

He based the deficit on the review of the economy, which suggested a total revenue of $53 billion, and based on expenditure which was debated and approved in Parliament of $62 billion. “So (from) my simple maths, we are supposed to have an $8 billion deficit, not the small amount that the minister presented here.”

Lee said energy sector contraction of .3 per cent, suggested in the mid-year review of the economy, was the ninth contraction. He said real GDP in the petrochemical sector fell by 3.5 per cent, output in the crude oil exploration and extraction industries fell by 4.5 per cent; condensate extraction contracted by 8.2 per cent and refining LNG industries decreased by 1 per cent.

“This is not a simple contraction, Listening to the ministry of energy, I don’t know what they have done in the last eight years. The government has never surpassed the work of the PP government in the energy sector.”

Lee addressed statements by MP for Laventille East/Morvant and Minister in the Ministry of Housing Adrian Leonce, who listed a number of initiatives positively contributing to his constituency. Lee said those initiatives had always been around. He sought incentives for his constituency as well, asking for the government to fulfil its promise to build the Claxton Bay Primary School, provide vehicles for the St Margaret’s Police Station and clean waterways in Claxton Bay.

No bitumen shortage

In a meeting of the Standing Finance Committee of the House of Representatives, Works and Transport Minister Rohan Sinanan dismissed claims from Couva North MP Ravi Ratiram about a shortage of bitumen. Ratiram claimed there had been a shortage of bitumen since the closure of Petrotrin’s Pointe-a-Pierre refinery in November 2018.

Sinanan reminded him that bitumen was a by-product at the refinery and Trinidad Lake Asphalt paid Petrotrin to receive it. Committee chairman, House Speaker Bridgid Annisette-George told Ratiram, “We are not here talking about Petrotrin. “The question that you asked has been answered and I’m not going to allow further discussion about Petrotrin, under this item.”

Barataria/San Juan MP Saddam Hosein asked where Lake Asphalt sourced bitumen from. Sinanan replied, “Right now the market is open. So anybody, whether it’s Lake Asphalt and the contractors or anybody who wants bitumen could buy it from any source as it is available. Bitumen comes in from several sources.”

Sinanan said it had been happening for the last 40 years.

“It is not a new thing.”

He reiterated that Lake Asphalt was being reorganised. Up to 2022, the company’s expenditure exceeded its revenue. He recalled that Lake Asphalt made significant profits in the past from selling products from the Pitch Lake in La Brea. The company drifted from its moorings over time and reorganisation was an attempt to return it to those moorings.

At a PNM meeting in Diego Martin on April 5, 2022, the Prime Minister said the company was placed under the Works and Transport Ministry, with the National Infrastructure Development Company being its operating agency. Lake Asphalt revenue was negatively affected by the closure of Petrotrin in November 2018, since much of that revenue came from selling bitumen from the Petrotrin refinery. Bitumen, a by-product of the crude oil refining process, is used as a binder to hold asphalt together.

Rowley also said a new business model would be created to make the company sustainable.

The committee later approved an allocation of $358,779,000 for the Planning and Development Ministry.

LNG restructuring in November

Contributing to the 2024 Budget debate in Parliament Prime Minister Dr Keith Rowley said he will be going to London in November. to sign the agreement for restructuring of Atlantic LNG.

The signing will be the culmination of “…an outstanding period of work for which I want to congratulate the Energy Minister, his advisers, the lawyers, experts, our local and foreign legal teams who negotiated with those international companies and out of it has come improved arrangements .”

Atlantic has four trains, with three different ownership structures:

• Train 1 is owned by Shell (51 per cent), BP (39 per cent) and NGC (10 per cent);

• Trains 2 and 3 are owned 57.5 per cent by Shell and 42.5 per cent by BP;

• Train 4 is owned Shell (51.11 per cent), BP (37.78 per cent) and NGC (11.11 per cent).

Train 1 has been idled because its 20-year natural gas supply agreement ended in 2019.

The main purpose of the restructuring is to transform and simplify the three different ownership structures into a single unitised facility with a common ownership structure. The process for restructuring the LNG facility, located in Point Fortin, started in 2018, when Government initiated discussions with the major gas producers BP Trinidad and Tobago LLC (bpTT) and Shell Trinidad and Tobago on natural gas-related issues.

One major outcome of the negotiations with bpTT and Shell was an agreement by the parties to restructure Atlantic LNG, Rowley said in a speech in December 2022. In March 2019, shareholders of Atlantic LNG signed a letter of intent affirming their willingness to agree to discuss with Government the restructuring of Atlantic LNG.

In April 2020, the shareholders submitted a proposal to Government to commence negotiations on a Heads of Agreement which was to be followed by definitive agreements. Following intensive negotiations agreement was reached on a Heads of Agreement (HOA).
On January 25, 2022, the Government and Atlantic LNG Shareholders signed the HOA that outlined the governing principles referred to as the Government Principles that will form the basis of the Definitive Restructuring Agreements for the restructuring of Atlantic LNG.

The Government and Atlantic shareholders signed an amended and restated HOA on the restructuring of Atlantic LNG on December 6, 2022. The restructuring of Atlantic will provide opportunities for non-shareholder, third party natural gas producers to participate in the liquefaction of the commodity at Point Lisas, said Rowley in December 2022. The restructuring is also expected to result in a new pricing arrangement for the LNG sold by the unitised company.

“In 2018 we agreed with both bpTT and Shell on a pricing arrangement for LNG, the Train 1 FOB price. This pricing formula is based on three market reflective prices, namely 1/3 Brent, 1/3 Japan and Korea Market (JKM) and 1/3 NBP (the UK benchmark). t was further agreed that new marketing arrangements would adopt this pricing as compared to Henry Hub, on which most LNG marketing arrangements were based, and to a lesser extent the Spanish market power price,” said Rowley ten months ago.

UNC deals

Energy Minister Stuart Young said UNC deals cost TT’s energy sector billions of dollars in claims and lost revenue but the PNM negotiated with stakeholders and facilitated the turnaround of the energy sector.

In the budget debate, a week after Finance Minister Colm Imbert laid the proposed budget in Parliament, Young chronicled a list of deals made by the then People’s Partnership Government.

Young said because of TT’s century-long history of producing oil and gas, reserves in its territories have become mature, but up to 2010, proper planning resulted in production increasing.

“In 2006 we were producing 3.8 bcf/day (billion cubic standard feet/day). In 2008 we went to four bcf/day. In 2009, 4.2bcf/day. All that production was a result of decisions taken in advance – at least five years in advance.”

The best year for natural-gas production was in 2010, when the People’s Partnership took office, but gas declined from 4.3 bcf/day in 2010 to 3.8 bcf/day in 2015.

In the oil-production sector TT produced 114,000 barrels a day in 2008. By 2010 it fell to 98,000 barrels. In 2012 it sank to 81,000 barrels and in 2015 it declined to 78,000 barrels per day. “The government of the day should have had foresight to begin negotiations to develop the sector but did not. It is an indisputable fact that not a single upstream gas-supply contract was negotiated in that period of 2010-2015. The incentives spoken by a former minister of energy did not negotiate a single gas-supply contract.”

National Gas Company, from 2010-2015, did not receive natural gas from upstream suppliers. As a result it was forced to curtail supply to downstream suppliers. There were no attempts to have discussions or renegotiate deals with NGC and downstream suppliers but about $14 billion “disappeared” from NGC coffers.

“When these curtailments started in 2010 and peaked in 2014-2015, the result was claims being made to NGC for a failure to supply during that period. This is an indisputable fact.”

Total value of the claims against NGC was US$1.8 billion/TT$8.85 billion.

“The PP government had options to renew certain contracts but ignored them. There was a contract with our largest upstream gas supplier that was due to expire in December 2018. Under that gas-supply contract, there was a contractual timeline that (from) January 1, 2014, you had two years to meet and negotiate an extension of the gas-supply contract. They did not do it. The UNC failed to negotiate gas-supply contracts for TT where the contract required them to meet, but they have the audacity to ask TT why we are in this position.”

Another “base” gas-supply contract that was not renewed on its expiry in December 2015 resulted in a loss of 250 mscf/day (standard cubic feet) of gas. Government lost over 1.2 bcf/day (billion standard cubic feet/day) in production because of its refusal to renew contracts. The one contract that was negotiated by the PP Government led to it losing claims.

“It was negotiated at a time when you were seeing a curtailment of gas. So if you know you have less gas to sell to the existing plants, you would go now and put priority on a new plant to give it gas, as opposed to those who have been there for us for decades. We lost claims as a result of that one contract.”

The PP Government changed gas allocation policy to a Greenfield gas policy that meant, in a situation where there was limited gas, NGC would supply gas on an availability basis to newer plants and give older plants, already contracted to receive gas, less gas or no gas .

“It led to the only loss NGC ever made in its 2020 annual report because we had to provision TT$2.1 billion as losses as a result of this one contract that they did.”

The PNM government did not sit idly by in the face of declining production, but through negotiating with stakeholders upstream and downstream, was able to reverse damage done by the previous government. As a result there were signs of a turnaround in the energy sector.

Thanks to the intervention of the government, TT had renegotiated the claims by petrochemical stakeholders in the downstream, resulting in the Government saving US$1.1 billion. While there were no gas-supply contracts in the previous administration, Government negotiated 31 upstream contracts and 115 downstream contracts.

Government also renegotiated LNG contracts with better terms for TT. With regard to NGC, Government signed an EPC (Engineering, Procurement and Construction) contract. He said this, along with the restructuring of Atlantic LNG, opened opportunities for deepwater and cross-border gas production. A new formula for the value of TT gas resulted in a $6 billion recovery of revenue.

Finalisation of several projects, including the Cascadura project, Cassia C project and others, will secure gas supplies. Bbecause of the direct intervention of government, in some cases a personal visit from the Prime Minister to energy stakeholders, several projects came on stream.

“Osprey with EOG, the finalisation of the truck project with BHP, the Iguana project with De Novo, the Dolphin development with Shell, the Ruby Development with BHP, were all a result of direct intervention by the Government. And there are more.”

Pointe-a-Pierre MP David Lee did not deny claims of mismanagement under the PP but said the government continues to blame the UNC for its shortcomings. Lee said, quoting from a report from a JSC on state enterprises which was laid in July 2016, companies were aware of upcoming negotiations.

“What the management was saying in 2016 is they knew that hard negotiation on expired contracts were due over the next five years.

“Who was in government? This administration. They are the ones responsible for renegotiating contracts, not the PP Government.”

Contracts and deals which Young complained about were signed during the PNM’s tenure before the PP Government took office.

“If he finds those terms and conditions were strenuous and against the country, they were the ones that originally negotiated those contracts.”

Opposition Leader Kamla Persad-Bissessar’s response to the 2023/2024 national budget on October 6- continued

Opposition Leader Kamla Persad-Bissessar spoke with her MPs in the Parliament Chamber after the Finance Minister’s presentation of the national budget on October 2.
SWAHA budget recommendations

The SWAHA board and executive wish to suggest the following for consideration:

*Local Government and Social Development: Increased allocations to local government to facilitate effective infrastructural works and the efficient delivery of essential services to all communities. Increased engagement with NGOs/NPOs for social development programmes.

* Crime: Focus on developing a crime action plan to reduce serious crimes, including the introduction of nationwide CCTVs, drones to patrol borders, and automation of Port and Customs. Seek foreign consultants to plan and execute crime plans.

*VAT and other taxes and duties: removal of VAT on essential foods and everyday pharmacy items. Remove duties and taxes on baby food and products. Removal of seven per cent online purchase tax

*Education: GATE: Allow funding for programmes with a need or future need and do not limit people who have already benefited. Expansion and upgrade of the Textbook Management Programme to include greater availability of e-textbooks. Complete construction of unfinished primary, secondary and ECCE schools.

*Legislative agenda: Revisit procurement legislation to promote transparency and accountability. Proclaim legislation on data privacy, data protection, cybersecurity and full proclamation on the Electronic Transaction Act. Property tax legislation to be reviewed in the context of current unresolved issues.

*Taxation: Automation of BIR, including cashless payments and refunds. Revisit tiered approach to PAYE. Tax incentives for non-institutional investors (public) to increase participation in the securities market.

*Micro, Small and Medium Enterprises: Public/private equity fund or venture capital fund. Expand Nedco funding. Government guarantee for MSME loans. Reintroduction of the Fair Share Programme. Further incentivise SME listing on the TTSE.

Recommendations from public consultations:

*Agriculture: D. Rogers highlighted the pressing issues affecting crop reduction. Currently, Nestle is importing milk and poultry production has hit a low point. He recommended the Government to present a comprehensive plan for the agriculture sector.

*Crime: S. Mitchell suggested linking all existing residential and commercial security cameras in Chaguanas into an overarching security system that systematically covers areas, in collaboration with artificial intelligence, to identify criminals as they move from place to place.

*Culture: Banjela, the 2020 Calypso Young King, recommended partnerships with educational institutions to integrate cultural education into the curriculum, fostering cultural pride and identity from an early age.

*Education: J. Ali recommended the completion of construction of the Preysal Primary School. Pupils are being housed at a community centre for the past five years.

*Health care for children/ disability grants: P. Lezama asked for the wait time and lack of beds at the hospitals to be addressed. Concerns with the funding given to senior citizens and persons with disabilities. Recommended that increased funding for differently abled children to cover their medical expenses.

K. Townsend revealed that Mayaro residents have to go to Sangre Grande or San Fernando to access hospital care and recommended the upgrade of the health facility. Dr Narendra Roopnarine noted the need to improve the quality of health care provision and quantity. He suggested maternal health education be part of the school curriculum.

*Legal firearm access: R. Singh mentioned difficulties in obtaining an FUL (firearm user’s license). Recommended the process be made easier.

*Infrastructure: In every consultation , people complain about the state of roads and bridges.

C. Jackman, from the OWTU, emphasised that closure of Petrotrin not only meant that we no longer produced fuel for domestic consumption but also did not produce bitumen, which is necessary for paving roads. Residents nationwide have complained about the dilapidated state of recreation grounds .

*Petrotrin pension plan: Mr Golcharran, a former employee of Petrotrin, raised concerns about the status of the pension plan which has been steadily deteriorating since the company’s shutdown. He recommended that the Government should allocate money to bolster the Petrotrin pension plan and for the minister to provide an update on the plan.

*Praedial larceny: Many farmers raised the problem of praedial larceny at our consultations, and this deserves a special mention. The farmers suggested the Government provide the praedial larceny units with vehicles, proper equipment, and staffing.

*Prisoner rehabilitation: N. Moses suggested the need for a proper parole system in TT which can help with the judicial system to ensure crime goes down.

*Recreation: K. Rampersad wants more recreation grounds illuminated and upkept as there is a need for more people to exercise and increase family bonding.

*Scholarships: E. Cheddie requested increased allocations to provide more scholarships for poor and disadvantaged students.

*Special-needs citizens: H. Narinesingh recommended more special-needs schools and an increase in special-needs grants.

*Tourism: In Sangre Grande and Mayaro, residents recommended tourism development along the east coast to become a premier tourist destination in the Caribbean.

*Water: Citizens complained about the lack of water and the fact that not only does the Government expect them to pay bills and not receive the service, but is planning to raise rates. Residents complained of not getting pipe-borne water for almost 50 days. Some called for removal of the CEO of WASA e .

*Youth unemployment: A. Gosyne recommended that the Government address employment for youth, over saturation of the on-the-job programme and waiting period for a first interview lasting years.

Areas of greatest concern

If government had consulted the people before this budget, the finance minister would have had an accurate list of priorities to impact areas of greatest concern positively.

That’s what we did when we were in government. When you talk to people, they will often give you very useful solutions. Indeed, citizens are very creative and informed. Many came to these consultations well-prepared, some with pages of ideas to share.

“And that is the tragedy of this Government, they do not harness the potential, the experience, the ideas, or the greatness of our society. That is the attitude of this Government. We, on this side, are showing the country that our philosophy and practice are different, and the way we govern is participatory. People have given this Government endless chances for co-operative participation, but it fails them every time.”

“Year after year, this Government comes to this House and deludes themselves that the country is doing well, that the population is doing well, while citizens know the truth. It has cost our citizens $420 billion since they have taken office and will cost a further $59.209 billion (or more correctly $71.4 billion) over the next 12 months. Totalling almost $500 billion dollars or half a trillion dollars.”

“By the end of fiscal 2024, this Government would have spent almost half a trillion dollars.

This year, the minister has themed the budget “Building Capacity for Diversification and Growth,” but he has given us zero measures during his four hours presentation for diversifying the economy and generating new revenue streams.”

There can be no prosperity without economic security

Minister Imbert spent the first few minutes of his presentation, as always, trying to convince us that he inherited a country in crisis caused by low energy prices but was able to reverse the trend and move towards growth. Nothing is further from the truth as our macroeconomic indicators reveal.

There can be no prosperity without economic security.

GDP collapse post- 2015

“This Government’s anti-people decision-making undermined our economy, so much so that the real GDP collapsed by 10 billion dollars within the first year of the PNM taking office. And the country has not recovered to date! The per capita GDP, which grew to $140,000 during my tenure, has now collapsed to $110,200, a loss of 21 percent of its real value, and yet this minister continues to boast of how well he has managed the economy.

Instead of taking this country forward, the Government’s policies have regressed the broad-based distribution of the economy back to the 2006 levels of per capita GDP. The data is obvious. The transformation that the minister boasted about last year was the polarisation of the economy away from a broad-based, multi-sectoral, multi-disciplinary structure to one in which only the factored few mega businesses survived. When the minister boasts of the economy growing, take it with a handful of salt and instead ask him how much the economy has contracted since he took over the treasury in 2015.

I am proud that my Government has the distinction of the highest average national output in our country’s history during my tenure.”

Forex challenges:

“If the Government had continued UNC’s sport, education, and health tourism initiatives, our country would have generated millions in foreign exchange from new sources to complement revenues from the energy and small export manufacturing sector.

The deliberate, unilateral, and spontaneous decision to close Petrotrin has deprived our citizens of hundreds of millions of US dollars.

The Government’s laissez-faire attitude to non-energy businesses, even international ones like Arcelor Mittal, has seen positive foreign exchange revenue generators leave our shores.

The result has been a dramatic collapse in our foreign exchange reserves to the point where the Government is forced to borrow at higher than necessary interest rates to refinance foreign debt. In my Government’s last full year in office, 2014, the official data published by the Central Bank showed that we had approximately US$11.5 billion in reserves, roughly 13 months of import coverage. The Central Bank puts our net official reserves at $6,258.4 million or less than eight months import cover, as of August 2023. This is even though the Government has received billions in US dollars from traditional sources, including taxes and royalties from international energy companies and local manufacturers.

Added to that would have been the US$2.5 billion in drawdowns from the HSF, another US$644 million, received from the IMF via the special drawing rights, more than US$1.3 billion additionally received from the oil windfall, net borrowing of TT$ 33.6 billion over last eight years and the millions received in foreign grants during the pandemic. Where has this money gone?”

On Monday, when the minister had the opportunity to level with the country about the actual state of affairs of our nation’s foreign exchange reserves, the minister once more opted to misdirect and mislead.

I ask why the minister references 2022 figures for foreign exchange holdings? Why is he referring to gross official reserves rather than net official reserves? The answer is obvious. Having failed miserably actually to increase the real level of foreign exchange reserves, Minister Imbert is now artificially increasing the statistic by adding the foreign exchange held in private accounts in commercial banks (over which he has no control) as well as the savings in the HSF to come up with a new metric which he has termed “external fiscal buffers.”

Thousands of business people, particularly small and medium-sised businesses, and even average citizens, disagree with Minister Imbert when discussing forex availability. When businesses face closure because they cannot get money to pay suppliers, they are in crisis. SMEs constitute over 90 percent of registered businesses in this country. These businesses hire many workers, especially in retail. For these persons, the inability of their employers to get foreign exchange is a crisis. The shortage is also a crisis for parents and children pursuing education abroad who cannot get foreign exchange to continue to pay fees.

I call on the minister to engage in real and meaningful consultation concerning the nation’s foreign exchange distribution. This needs to be a public forum in which members of the public and small and medium-sized businesses are allowed to participate. But for this to be an open discussion with a real chance of a successful outcome as opposed to yet another talk shop, the minister needs to come clean to the population about who has been getting these billions in foreign exchange over the past eight years.

It is high time that the minister stops hiding behind legislation and provides answers to the population. Citizens being denied access to foreign exchange must be told who is getting it, how much, and why.

I also challenge the Minister to tell this country what new foreign exchange revenue streams he has piloted and developed over the past eight years he has been in office and how much revenue each has generated.

I want to use this opportunity to direct this minister to the UNC’s national economic transformation plan, which contains many new initiatives for potential foreign exchange earners, which he is free to use.

Foreign Direct Investment

Foreign direct investment is a significant source of foreign exchange, economic growth, and development. Growing FDI is a clear indication of investor confidence in an economy. Here is the status of this country regarding FDI: According to the most recent data published in the World Investment Report 2023, Foreign Direct Investment (FDI) to TT was negative, at -$0.5 billion. Instead of investment coming into TT, investment was leaving. In fact, the data shows clearly that while the Caribbean has had positive FDI, TT has lost FDI for five of the seven years for which data is available under this PNM Government.

While this minister fiddles away with investor confidence in this country, other countries in the Caribbean are openly pursuing investors with actual initiatives, proper marketing, and deliberate decisions to address investor decision-making. Under Minister Imbert, from September 2016 to December 2022, TT lost US $1.5 billion as foreign direct investment fled the country. By comparison, my Government generated high levels of foreign direct investment, with FDI from the energy sector totaling US$1.459 billion in 2015. As an example of sustainable FDI, in 2013, my cabinet approved the project development agreement for a new petrochemical plant, the Mitsubishi methanol to dimethyl ether (DME) plant.

Rating agencies

The minister spent quite a while in his presentation patting himself on his back because of Moody’s agency rating of this country. To be clear, Moody’s kept the country’s credit rating at Ba2, the same level the year before. That rating is within the non-investment grade category or junk status.

Allow me to remind the minister of some indisputable facts. Before he became minister, our country’s rating by Moody’s was A3, which was prime investment grade. Today, the minister celebrates a collapse to Ba2 JUNK status rating as a significant achievement. Only this minister can celebrate achieving a lower score than his predecessor and claim it is an improvement. The minister has a long way to go to recover the ground and international credit rating and reputation that he has cost this country. This is nothing to celebrate; a positive or stable outlook does not matter when you are five levels lower.

But even the outlook itself is speculative, and in this case, it is premised on the continued high revenues from oil and gas following the Russian/Ukraine conflict, or improved oil and gas production as well as the Government adopting specific harsh policies including further cutting of transfers and subsidies, implementation of the property tax, higher electricity rates and higher water rates, issues which severely compromise the standard of living of a substantial part of our population.

In July, the minister announced that the new rating would have positively impacted the cost of borrowing by the Government. However, in the recent bond issue of US$560 million, the Government was forced to offer rates of interest higher than other similar instruments on the market to attract investors, and again, the minister announced this as a reason to celebrate.

Value Added Tax

One of the most vexing issues for the business community of every size has been this Government’s abuse of businesses by illegally withholding VAT refunds. In May 2023, Minister Imbert admitted to TT that the Government owed businessmen almost $8 billion in VAT refunds at the end of March 2023. Six months have since passed, so logically, more businesses would have applied for due refunds since then.

The minister had advised then that a combination of bonds and cash payments would be used to settle a large portion of these arrears and suggested that repayment would have started between June and August 2023. I know that businessmen listening to the minister’s presentation would have been exceptionally disappointed that the minister avoided any mention of settling refunds. The hijacking of VAT refunds by the minister means that critical operating funds of businesses are inaccessible, and this directly affects the ability of these businesses to invest in stock, pay staff and meet debt obligations to financial institutions; it affects the businesses credit rating and viability. This multi-billion dollar outstanding and overdue VAT rebate is tantamount to the Government forcing struggling businesses (already burdened by crime, lack of access to forex, and a plethora of taxes) to provide tax-free loans to the Government.

The finance minister is sending mixed signals to the commercial sector. He continues to punish legitimate businesses abiding by the law, dutifully paying their taxes, and submitting their VAT returns on time in favour of those who break the law and evade the VAT.

VAT exemption for energy sector

To improve the Government’s ability to pay VAT returns to small and medium enterprises (SMEs), Minister of Finance Colm Imbert is considering waiving Value Added Tax (VAT) from the energy industry.

He noted this consideration, along with others to deal with the issue of VAT returns for the business community, during his keynote speech at the TT Manufacturers Association (TTMA) post-budget discussion.

Explaining the challenge the government had in paying VAT returns, he told business people the majority of returns owed were to the energy sector – which is zero-rated.

“Let’s say we have $7 billion in VAT refunds. Believe it or not, $6 billion of that is in the energy sector, (and) $1 billion is in the non-energy sector. I thought to myself, how did we get to this stage, where we owe the energy companies $6 million? And you know what it is? The energy sector is zero-rated. Therefore, for every cent they pay in VAT, they automatically are entitled to a refund. And I can assure you they apply for the refunds religiously, so they pay it and then they apply for it immediately. So you’re going to have this problem all the time.”

VAT is charged at a rate of 12.5 per cent on all goods and items sold in TT, with the exception of zero-rated items. VAT-registered businesses collect the tax from consumers and pay any VAT earned from sales to the Board of Inland Revenue. VAT-registered businesses can deduct any VAT that they pay when buying goods and services for businesses from the VAT they collect from customers. Since items such as crude oil (as defined in section 2 of the Petroleum Taxes Act), natural gas and iron ore are listed as zero-rated items, VAT is not collected on the sale of these items. So the energy industry, when paying VAT for other services and goods, can claim for VAT returns on everything it buys.

Imbert said exempting the sector from paying VAT could eliminate the problem: “They pay no VAT, and we don’t have to refund them.”

He is also considering moving away from VAT altogether and implementing a sales tax instead. But he noted that the transition was easier said than done.

“What you have to do is look at what is the revenue that you would get from a sales tax, as compared to a value-added tax – what would the size of the sales tax be to give you the same quantum of revenue that you get from a value-added tax.”

Compliance with a sales tax would present the same problems and maybe more than the VAT regime. The collection method for VAT is different from a sales tax.

“The thing about VAT, it’s added on to all the stages of the process. So you pay VAT as the goods come in, then as you add value and you sell it to somebody else, there’s a VAT element there. Then they may sell it to somebody else (and there) is another VAT element.

“So there are many ways of checking whether that is properly being assessed or not along the way. But a sales tax comes at the end. If you have avoidance and evasion in sales tax…you may find yourself, as a government, losing a lot of revenue. So we’re looking at it very carefully.

Germany to strengthen bilateral relations

German ambassador Christophe Eick at the German Embassy, Port of Spain, St Clair on September 26 – Jeff K. Mayers

September 26 – Jeff K. Mayers

The fall of the Berlin wall in 1989 was a pivotal moment for Germany, when it became a new republic, unifying East and West Germany after decades of separation throughout the Cold War.

Likewise, when TT became a republic in 1976, after 14 years of independence, a new nation’s citizens could manage their own destinies through their own head of state, instead of continuing under British rule.

With both countries celebrating the births of their nations – TT having celebrated Republic Day on September 24 and Germany celebrating Unification Day on October 3 – newly-appointed German Ambassador to TT Christophe Eick wants both countries to see the challenges they share, and how they can unite to make significant changes in the world, just as significant changes were made in both nations. At the German Embassy in St Clair, Port of Spain on September 26, Eick spoke on the similarities between Germany and TT, the shared challenges the two countries face and the opportunities that could be shared.

Eick said one of the most apparent challenges that TT and Germany share is the global challenge of climate change and energy transition. Eick said both countries are seeking to tackle the global challenge of energy transition, and although they are meeting it on different levels, they still face similar issues, one of which is dependency on fossil fuels.

“Energy transition is something that has to happen, but it certainly is a big challenge. It certainly is for countries that have depended on oil and gas for quite some time. I can very much understand that for TT it is something that is a challenge and there might be a different pace of transition.”

He noted Germany’s involvement in the development of TT’s oil and gas sector, with the German company Proman operating in TT for 30 years – building infrastructure and leveraging natural gas.

Eick also noted the challenges that Germany faces with its own dependency on fossil fuels, particularly with natural gas. On the Russian invasion of Ukraine last year, Germany sought to end its relationship with Russia, which oversaw the supply of natural gas to Germany and Europe via the Nord Stream and gas company Gazprom. Gazprom has since been nationalised and renamed SEFE and has been engaging in relationships with several countries around the world to ensure they are not dependent on Russia’s natural gas.

“This was a big lesson for us, which is that we should not be dependent on one supplier, because look at what happened. Obviously, we could not continue with this business model with Russian companies. We have ended this completely and this has certainly accelerated our transition – the Ukraine/Russian invasion moment which made us realise that we need to transition faster.”

The separation from Russian gas was not seamless, however, with several countries in Europe, including Germany, resorting to firing up coal-fired power plants to meet energy needs in winter. According to reports, Germany has begun to phase out its coal plants again, with some shut down since June and others expected to be shut down by March.

“There was a discussion about whether we had to use coal longer than we had anticipated. We have solved that problem. The coal industry is shutting down. But there are other things that we have to do for a longer time, in particular using LNG.”

Germany considers LNG a transition fuel which could be used for another 20 years, noting TT’s LNG industry and that TT transports a significant amount to Europe and by extension Germany. In 2021, according to a Reuters report, TT exported close to 7.9 million tonnes of LNG to Europe. In 2022, at the height of the invasion of Ukraine, exports increased by about 40 per cent.

“Transition means it has to take a period of time. You just have to be clear where you want to go. The Government knows that it has to transition; it is just a question of how to do it.”

Eick said in energy transition , TT and Germany also share opportunities in growing their hydrogen sector. During six weeks as ambassador he has already been in contact with German-based companies that would have an interest in TT’s renewable energy transition. Thus far, he had recently been in talks with global energy company Siemens Energy, trying to gauge the company’s interest in TT.

“Siemens are leaders worldwide for anything that has to do with energy projects, and in particular with renewable energy. They have an office in Point Lisas, and I think they would be very interested in entering into business relations with TT.”

Siemens is already working with HDF TT and Kennesjay Green Ltd on hydrogen projects.

“What makes TT attractive, I think, is that you have an infrastructure here, a long tradition of petrochemicals and energy, and you have the technical know-how. If you look at the thousands of people that come out of your universities who are extremely well trained in all aspects of energy, this is an attractive market. What we at the embassy can provide is help with connecting TT with these companies and making sure that the framework is there, and our chancellor said very clearly last week that we are offering our technical know-how to anyone that is interested.”

TT and Germany do not only share opportunities in energy. Eick said the embassy is already engaged in connecting TT and Germany with cocoa.

“TT cocoa is world-famous. It is once again gaining traction in TT.”

He recalled visiting UWI some 30 years ago and meeting Prof Pathmanathan Umaharan, who was then overseeing the development of the cocoa gene bank. He said the fact that he is being honoured now (Umaharan was awarded the Order of the Republic of TT this year) is an indication of the importance of cocoa in TT.

He spoke about a business called Ubergreen, a company that connects with small-scale cocoa farmers to export.

“They do small scale production of chocolate but export to Europe is their main business model.”

For all intents and purposes, Eick is an honorary Trini. In his first stint at the embassy some 30 years ago when it was based on Marli Street, he was able to absorb everything about TT from its industries to its culture. He is even married to a Trinidadian.

He said having returned to TT, he noticed many things have changed, just as in Germany, but TT citizens’ love for their country and the fact that it has strong and vocal leaders have not.

“We all have changed. We are more acutely aware of the challenges that we face, one of which is climate change.”

He lauded the Prime Minister for his speech at the UN General Assembly, where Dr Rowley spoke out against crime, making the murder of four young people in Guanapo the centre of his address.

“Crime, in particular guns and ammunition, is a scourge for this country and for the region. Many countries are trying to help, because it also has an effect on (other countries), including Europe. It is a challenge that we also share.”

He expressed condolences to relatives of the victims of the Guanapo killings.

Eick said each country has to seek its own path in curbing criminal activities, and in order to reduce it, there has to be a holistic approach. He said there has to be buy-in from the public and a belief in the system for any attempt to curb crime to be successful.

“You would see in Germany, when we want to fix something in our society, there are a lot of areas where we make improvements.”

He said most of all he admired how TT celebrates. He was able to be part of the recent Independence and Republic Day celebrations and said both exemplify a similar unity to that of Germany’s Unity Day.

“(On Independence Day) I was impressed by the people standing – not in the Grand Stand because they had shade, but there were people standing in the blazing sun; and they were the ones cheering the most. And President Kangaloo and all the armed forces that stood for hours in the sun were also impressive. That went on through the evening, with fireworks and more celebrating. It was a really peaceful atmosphere.

“The Republic Day award ceremony was really an example of what TT people can achieve. Because they came from all walks of life, and did a tremendous amount for this country and beyond.”

Solar energy

NGC president Mark Loquan, told the TT Chamber of Industry and Commerce annual post-budget discussion, that the National Gas Company is investing significant sums in a massive Caribbean solar-energy project announced by Shell and bp.

Describing the company’s “foray into the green space and taking the bold steps of going green.” he said while natural gas is the least harmful of fossil fuels used for energy production, the company is invested in a future of renewable energy.

Loquan did not share extensive details of NGC’s investment in an extensive solar-power project for which bp Alternative Energy TT and Shell Renewables Caribbean turned the sod earlier this year.

At the ceremony, the Prime Minister said the project represents part of TT’s strategy to “maximise the benefits it receives from oil and natural gas, tap into the economic potential offered by renewable energy, and fulfil its commitments under the Paris Climate Agreement.”

Dr Rowley said the country is seeking to pursue other renewable-energy projects to offset the natural gas being used for power.

At Tuesday’s discussion, Loquan stressed that natural gas is the cleanest fossil fuel burnt for energy as opposed to sources, such as coal.

“The thing about it is you hear the conversation and the narratives which are false – shut down fossil fuels, go with renewables, and, of course, that’s the right direction, but it is impossible to do physically, monetarily, resource-wise. That’s where we find ourselves today: that we have to wean ourselves off directionally. But it’s going to take time.”

Loquan admitted carbon emissions are largely responsible for the rise in temperatures and climate patterns. However, he also indicated a disparity between the countries mostly responsible and those suffering the worst consequences.

“You can see the symptoms of extreme weather patterns: heat, flood, famine, drought – but that is a result of emissions. Most of these emissions are coming from the global north,” he said, identifying the US and Russia, at the expense of southern countries.

It is important for citizens to become more energy-conscious.

“We have to be more efficient as a whole, as a country. And in the case of TT, it is even more important because we are gas-short, and if you’re gas-short, it means we can’t afford to just run lights…From a sustainability standpoint, we really need to get gas away from electricity. We need to get gas to (the plants) that (generate) foreign exchange and at the same time, we do need to build a system that brings everyone along.”

“The bridge, however, is not a one-year (journey); it is not a decade. In fact, if you talk to an energy company now, like NGC, like Shell, you will hear us talking 50.“

Budgetary balance

2023, 10/03

Finance Minister Colm Imbert was required to strike a balance between the economic need to maintain some measure of fiscal discipline and the socio-political demand to show empathy to those most in need in delivering the 2024 Budget. To a large extent, he got the balance right.

The initial estimate of the fiscal deficit in the current 2024 fiscal year is 2.7 per cent of GDP or $5.197 billion, based on total expenditure of $59.20 billion and total revenue of $54.012 billion.

Based on the projected expenditure of $59.20 billion, he satisfied those at the lowest end of T&T’s income pyramid by increasing the minimum wage by $3 an hour to $20.50, to take effect from January.

That measure should improve the standard of living of about 190,000 workers, including thousands employed by the Government. The hike would increase Government’s expenditure for workers at the minimum wage by at least $50 million per year.

The allocation of $1 billion in backpay for the 37,000 employees of trade unions who accepted the Government’s four per cent wage increase for 2014-2019 will add $360 million to the Government’s wage bill. He said he would ensure the payment of arrears before Christmas.

As a gesture of goodwill, the minister said he would seek Parliament’s approval to make tax-free the one-time lump sum payment of $4,000 for 1,600 monthly paid and 100 hourly, daily and weekly-rated workers who retired between January 1, 2014 and September 30, 2016. That measure will cost Government $19.7 million in revenue foregone.

The Government included a $1,000 school supplies and book grant to 65,000 needy students, which will cost $65 million in 2024.

These four measures in the Budget could potentially positively impact the lives of an estimated 293,700 people at a cost of $1.49 billion. Many recipients of the minimum wage rise will be among recipients of the $1,000 book grant.

On the other hand, the Government intended to start collecting the property tax in the 2024 financial year, which began on Sunday.

He forecast that in its new business model, WASA was expected to reduce its dependence on government subventions which, in the 2019-2023 period, amounted to $8.118 billion.

“We expect the net deficit of WASA to be substantially narrowed following the completion of the WASA price review by the Regulated Industries Commission (RIC),” Mr Imbert noted.

The Minister revealed that the Government was paying dearly to subsidise the consumption of approximately eight per cent of the total natural gas produced in the country to generate electricity. In addition to that subsidy, the Government provided 121,000 low-income households with a rebate of 35 per cent on their electricity bills at a cost of $268 million between 2019 and 2023 fiscal years. While he did not explicitly say electricity rates would increase, T&TEC, like WASA, has a rate increase application before the RIC.

While tens of thousands of citizens will no doubt benefit from the 2024 Budget, he seems to be signalling that even more citizens will be required to dig deeply into their pockets in this fiscal year.

Extra boost in 2023 gas output

2023, 10/03

Finance Minister Colm Imbert says that T&T is expecting gas production to stabilise in 2023 based on projects on stream in mid-to-late 2022. These include Shell’s Colibri project and bpTT’s Cassia compression project.

In the 2024 Budget presentation , the minister outlined that gas production is expected to be boosted further in 2023 by bpTT’s Infill Programme in the Mango, Savonette and Angelin fields, EOG Resources’ Osprey West and East developments and Touchstone’s Cascadura development onshore.

Between 2024 to 2026, additional projects will serve to maintain natural gas production, such as developing the South East Queen’s Beach field by bpTT, the Mento field by EOG and the Aphrodite field by Shell. Expanded development of the Cascadura field onshore is expected in this period.

“For the long term, the coming on stream of Shell’s Manatee project is expected to assist in significantly reducing the natural gas deficit. Furthermore, significant progress on negotiations regarding Woodside’s Calypso deepwater development has been made, and we are eagerly looking forward to bringing this project to fruition.”

The Government intends to maintain the momentum of upstream exploration through the availability of acreage onshore and offshore.

“We have recently evaluated the bids resulting from the 2021 Deep Water Competitive Bid Round and awarded three deepwater blocks to a consortium of bpTT and Shell. The material production sharing contracts have recently been executed and established not only a new frontier for our oil and gas development but also a foundation for the sustainable flow of natural gas.”

In 2022 the Onshore and Nearshore Competitive Bid Round was successful with the receipt of 16 bids for eight of the blocks. This bid round will be followed by a Shallow Water Bid Round offering 26 blocks.

“We are encouraging upstream investments both offshore and onshore and ensuring that we realise the optimum value from exploiting our remaining hydrocarbon resources.”

To assist this process, in the Finance Bill 2023, he will make further appropriate adjustments to the Supplemental Petroleum Tax regime for small oil producers in the shallow water areas, similar to what the Government has done for small onshore producers.

“We will also re-examine the capital expenditure write-off regime to determine what changes can be made without sacrificing too much revenue.”

Budget relief or election bait
The epic budget presentation, which lasted over four hours, was revealing not only for what was said but for what was left unsaid. The Finance Minister glossed over the fact that projected revenue for the upcoming year is $54 billion, down from last year’s initial projection.

While it remains higher than previous years, its ebb comes amid boasting about a rebound: growth doubled from 1.5 per cent in 2022 to three per cent in the first quarter of this year. Unemployment is now just 3.7 per cent, statistically close to “full employment.”

So why will revenues not reflect this momentum? Why is expenditure expected to outstrip earnings yet again, resulting in a $5.2 billion deficit?

The answer relates to the fact that much of this revenue is still not tied to real economic performance, but rather oil prices. The minister pegged the budget on an assumption of US$85 per barrel, compared with US$92.50 per barrel in 2023.

While the non-energy sector keeps recording stellar growth and non-oil revenue is expected to be $35.5 billion – more than double oil revenue – the pace of growth is simply not fast enough to keep the economy on an even keel as yet.

This is the context in which the decision to provide much relief to the population should be understood. An increase in the minimum wage to $20.50 will benefit 190,000 people; a $1,000 schoolbook grant will benefit 65,000 students; a deferral of residential property tax for the needy; a freeze on National Insurance Scheme (NIS) contribution increases for now; backpay by Christmas for public-sector workers; and efforts to ease foreign-exchange pressures and make it easier to use e-payments.

Schools will benefit from new measures that will allow the private sector to provide sponsorship up to $500,000. The message was an acknowledgement that the Government understands it must do something to help, even if it is constrained.

Even before the Minister rose to begin his speech, aspects of that constraint had already been written by public expectations arising from high crime levels. Tripling of police recruits and more police cars are evidence of a shift in the Government’s approach, though there will be much to discuss on the anti-crime front in coming days and weeks.

By the end of the presentation, in which much emphasis was placed on global uncertainties, clouds had gathered over the Parliament building. Despite provision of some momentary respite, thunder and lightning over the capital city on Monday night spoke symbolically of possible stormy times ahead.

This smells, looks and talks like a 2025 election give-away budget as homicides approach 500, following Jamaica with 1400 and Haiti with over 2000. Like Moko Jumbies, crimes dominated presentations at the UNGA and Caricom-Canada summit.

Conflict in Eastern Europe, Africa and the Middle East crush the world, abounding in resources, amid natural and self-inflicted disasters driven by cancel culture, sacrilege of heritage, sectarian strife and racial envy.

Chambers support minimum wage rise

2 October

Business chambers support the increase in the minimum wage from $17.50 to $20.50 per hour in the 2023/24 budget.

The TT Chamber of Industry and Commerce (TTCIC) said the increase now requires employers and employees to focus on efficiency, productivity, and output.

“The TTCIC also understands the need for an increase in minimum wage as a necessary adjustment for the workforce given the current state of inflation.”

However, while commending the increase, president of the Greater San Fernando Chamber of Commerce, Kiran Singh, hoped this would not result in higher prices for customers.

“The issue, though, that some business people will feel and face, especially those within the MSME (micro, small & medium enterprise) sector will be that some cost of goods and services will increase, and we are not sure how much of that will lead to some level of unemployment.”

“But we hope that business would be able to absorb that cost to ensure that…we remain at full employment and that workers do not suffer and that productivity levels would increase.”

The American Chamber of Commerce (AMCHAM) also supported the rise. Both AMCHAM and the TTCIC noted measures geared toward improving and growing the non-energy sector.

“We wait to see the impact of these measures,” AMCHAM said.

Citing the three per cent growth in the economy, primarily in the non-energy sector, the TTCIC said, “The time is right for much-needed emphasis to be placed on the agriculture sector, digital transformation, the orange economy, and micro, small, and medium-sized enterprises.”

While Minister Colm Imbert said foreign-exchange shortages will be addressed in 2024, the TTCIC said the issue needs to be urgently addressed.

“Timely access to forex is vital for businesses and the economy as a whole, as it impacts international trade and the stability of the local currency. Collaboration with the private sector and the Central Bank to optimise forex utilisation is essential for economic stability. In this vein, we are heartened to hear the minister is reviewing the recommendation made by the TTCIC to aid SMEs in their access to foreign exchange.”

AMCHAM expressed concern over the lack of a firm timeline for the implementation of the National Statistical Institute (NSI).

“We look forward to the establishment of the NSI this year as it has been featured in previous budgets but is yet to come to fruition. The establishment and operationalisation of the NSI is necessary if the Government is serious about using data to effectively design and implement policy.”

On Monday, the Minister of Finance presented the 2023/24 national budget-themed Building Capacity for Diversification and Growth, with a deficit of $5.197 billion. Total revenue will be $54.012 billion, and total expenditure will be $59.209 billion. Among fiscal measures announced were $1 billion in back pay by Christmas for 37,000 workers who accepted the four per cent wage increase and more police recruits and resources.

TRINIDAD AND TOBAGO ON GROWTH PATH

In an upbeat budget 2024 in the House of Representatives, on a theme of moving from recovery to growth, Finance Minister Colm Imbert delivered generous provision for the disadvantaged, tax breaks to companies to boost innovation and sought to secure society’s safety.

The minister proposed to earn $54 billion and spend $59 billion, for a $5 billion deficit with a budget predicated on oil at $85 per barrel (WTI) and natural gas at US$5MMBtu.

For the disadvantaged, he promised a $20.50 minimum wage, a means-tested $1,000 schoolbook grant, a $4,000 grant to some public service retirees, plus accommodation to the most vulnerable.

He did not address food prices, in the light of food-price inflation down to four per cent from 17 per cent late last year.

In addition to the existing $7,500 personal tax break, he gave tax breaks for aspects of oil/gas exploitation (small company, shallow-water exploration), exporters and companies investing in cybersecurity.

Gasoline prices at current levels as he anticipated giving a $1 billion subsidy in 2024. The dreaded property tax will be launched next year.

Regarding the pressing question of law and order, he promised to recruit 1,000 new police officers next year instead of the usual 300. The police will get an extra $80 million for vehicles and equipment plus $15 million for a riverine unit in Carenage. He announced $90 million to buy four scanners for TT’s ports, plus $4.5 million to buy 16 hand-held scanners.

He promised more consultations on actuarial recommendations to defer the retirement age from 60 to 65 to narrow the gap between contributions and claims on the National Insurance Board (NIB) pension fund.

He gave the background for justifying titling his budget Building Capacity for Diversification and Growth.

“I am pleased to confirm that economic activity rebounded in TT in 2022, under the influence of favourable terms of trade.”

After contracting by one per cent in 2021, which was actually an improvement on the contraction in 2020 due to covid19, the economy grew by 1.5 per cent in 2022. Growth continued in early 2023 at 3 per cent.

“Significantly and from a diversification perspective, economic growth was driven by a buoyant non-energy sector, which expanded by 5.8 per cent in 2022.”

While prices were raised by global supply-chain problems and by local flooding affecting food crops, TT had got a grip on inflation, now at four per cent.

“The financial system is sound, with adequate and appropriate capital, liquidity and profitability levels.”

Boasting of TT’s creditworthiness, he said its reputation was reflected by its recent half-billion-dollar bond being oversubscribed by three times.

“For the first time in more than ten years, we recorded a fiscal surplus in 2022 – 0.6 per cent of GDP.”

He advocated “preserving support for the most vulnerable and protecting essential capital spending. We firmly believe that capital expenditure must be maintained and expanded, as this creates jobs and stimulates economic activity, thus fostering economic growth. We are heartened by the projected growth in real GDP per-capita income, which in 2022 recorded US$16,500 and is projected to grow to US$18,400 in 2025.”

ECONOMIC GROWTH

“Madam Speaker, we have also just received good news on the employment front.”

CSO data showed unemployment fell to 3.7 per cent in April-June, from 4.9 per cent in January-March.

“This rate is one of the lowest unemployment rates ever achieved in TT and augurs very well for the future.”

He said the energy sector will remain the economy’s primary growth engine in the near to medium term.

“With the economic recovery taking root in 2022, our growth rate in 2023 is now estimated at 2.7 per cent, with broadly similar growth rates in 2024 and 2025.”

Unions that had agreed to a 4 per cent wage-hike include those representing fire, prison and police officers, TTUTA, the Amalgamated Workers’ Union and the Defence Force Pay Review Committee. Their retirees would get a one-time lump sum payment of $4,000, at a cost to the Government of $19.7 million.

“This special payment will benefit approximately 1,600 monthly-paid officers and 100 hourly, daily and weekly-rated workers who retired between January 1, 2014 and September 30, 2016.”

For those with concluded pay-rise agreements, he said, “I am also giving these 37,000 public-sector workers an undertaking that all ministries and agencies involved will be provided with the necessary funds to pay this $1 billion in back pay by Christmas 2023.”

Tobago House of Assembly’s (THA) allocation was $2.585 billion – $2.298 billion in recurrent expenditure; $260 million is development expenditure; $18 million for URP and $9.2 million for CEPEP. It is an increase of $64.2 million over last year. Beyond that, an additional $678.5 million is allocated to ministries and state agencies for major projects in Tobago.

On the governance landscape, he expected to see the full proclamation of gambling legislation for the operating of a gambling commission, the promised creation of a TT Mortgage Bank by merging the TTMF and Home Mortgage Bank, and operation of Phoenix Park and Moruga Park.

Advocating efforts at food security, he promised an extra $400 million to the Ministry of Agriculture in 2024, namely $250 million in farmers’ incentives and $150 million to develop infrastructure via the Palo Seco Agricultural Enterprises Company.

In the petrochemical sector, he proposed to use green hydrogen to manufacture ammonia and said talks were under way with Proman and Methanex towards a methanol-based marine-fuel bunkering facility (to supply fuel to ships.)

He advocated for the digitisation of many transactions and encouraged the use of e-payments. He lamented that a majority of businesses do not have an online banking or accept payment by digital means.

He said the Government would donate 2,400 fit-for-purpose laptops available to pupils and staff at 94 secondary schools.

“This digital ecosystem will offer online platforms and services for teachers and students to respond effectively to the changing needs of an increasingly digital society, particularly for business-oriented opportunities.”

On the vexed question of high demand for forex, he promised to try to get better access for SMEs and the repatriation to TT of business funds held abroad.

On education, he hoped to consult over the plight of parents facing “ever-changing book lists,” but meanwhile, 65,000 needy pupils will get a $1,000 book grant, at a cost to the Government of $65 million. He promised a training programme to boost the number of tech/voc teachers . Some $7.7 million would be allocated to introduce the Junior Achievement programme to schools.

“I propose to introduce a 150 per cent tax allowance of up to $500,000 on corporate sponsorship to public and private schools registered with the Ministry of Education.”

Imbert allocated $7.69 million for the Adult Literacy Tutors Association to run an online literacy programme to reach remote areas and CEPEP and URP workers.

On housing, he announced $1.5 billion to reduce debt to housing contractors.

“We have in stock 1,692 unfinished units, and we envisage that we will spend approximately $350 million on ongoing and stalled legacy projects.

“I propose to allocate $100 million in 2024 for ongoing and new projects under the Housing and Village Improvement Programme.” He proposed $700 million for the HDC to build 500-600 new housing units.

Imbert promised initiatives to boost the water supply, earning groans from opposition MPs.

He allocated $5 million for a programme aimed at at-risk communities, “to produce better informed, educated and more financially literate citizens with the skills and knowledge to make sensible decisions about their money.”

“I have allocated $19.5 million in 2024 to administer this community arts and crafts initiative in community centres throughout Trinidad.”

For the homeless, he allowed $23 million for an assessment centre/shelter at South Quay, Port of Spain, and $8 million for displaced centres elsewhere.

“We are establishing at Beach Camp, Palo Seco, a transition home to provide accommodation and other social services to former wards of the state who, at the age of 18, were required to vacate community residences established to house minors.”

Security – too little, too late

Opposition Leader Kamla Persad-Bissessar wants the government to know that increasing the number of police officers in the country and “pelting money at problems” will not solve crime.

Finance Minister Colm Imbert outlined some measures for national security in the 2024 budget in Parliament. From next year, the annual intake of recruits in the police service will triple, from 300 to 1,000.

To facilitate this, Imbert said there will be a “hybrid approach” to training recruits at facilities other than the Police Academy.

“The Ministry of Youth and National Service will make available the use of the Chaguaramas Convention Centre…on an interim basis for this purpose while the capacity of the Police Academy Building is being expanded. A number of schools will also be used after regular hours to train the additional police recruits.”

Funding for more trainers will be provided. An additional $80 million will fund new vehicles and equipment for the police and $15 million will create a riverine police unit at Carenage Police Station.

Persad-Bissessar told a post-budget press conference at the Red House,

the current crime situation is a “nightmare” and a “horror” that happens every day. This, left her perplexed that in Imbert’s four-hour-plus speech, he mentioned crime “late.”

On the increase in recruits, she questioned how soon it could become a reality.

“When is that going to happen? How does it happen? You get them today and you hire them tomorrow? There’s a whole process that has to be gone through, so don’t expect any new boots on the ground any time soon.”

Many of police stations are “dilapidated” and “have no equipment.

“They can’t even get paper to write up their reports on. Without getting disrespectful, they don’t even have toilet paper. So you going to bring in people, but you not improving, and then pelt money, pelt more money. That is what this minister is doing. “More money for this, more money for that, but no new ideas.

“More money isn’t going to solve the problem. You have to come with new solutions, new ideas, new proposals…”

In 2016 at the opening of the St Joseph Police Station, the Prime Minister boasted that TT’s number per capita of policemen “is well above the international average. “So it very well might not be a shortage of police officers on the job. So then what is the question?

“So it might well be what some police officers will tell you, not enough cars or not enough this or not enough that. But then you try to solve that, and it cannot be solved by giving every policeman a car…”

What was neededwas a “proper, comprehensive, across-the-board assessment of what is our police manpower and how are they deployed and how can they be redeployed under the current circumstances to get the best of that.”

Opposition members, who surrounded Persad-Bissessar, suggested the government’s memory may be failing. On its website, the police service says there are over 6,500 officers in varying ranks.

Calling it a “painful budget,” Persad-Bissessar said it was very deceptive and while some of it may sound good on paper, it may not necessarily be the case.

“We see repeats of the same issues. So the promises are made, they sound great and wonderful, and when you go backwards, you will see broken promises.”

She said Imbert cherry-picked data and used percentages and statistics to make things sound good, comparing his speech to a book titled How to Lie with Statistics (by Darrell Huff).

Asked if there was any part of the budget with which the Opposition was pleased, several members shouted: “The end!”

Persad-Bissessar said she was happy the minimum wage would be increased, but $20.50 an hour was still not enough. Recently, she called for this to increase to $25. She was happy the issue of schoolbooks was being addressed, as the government will consult with stakeholders to attempt to standardise textbooks. However, she said, “That is not the way to go.”

She said the only thing the government should do now is to leave office.

POLICE POINTS-

Many police officers are corrupt and are often engaged in crime. The low detection rate proves they are lazy, incompetent and partisan. Vehicles can be easily repaired, with mechanics in every village. Even in modern police stations like Tunapuna, where police have computers they do not keep records and are unwilling to accept written reports from victims of crime. Hate crime, rape, burglary, kidnap, gun crime, knife crime, drug crime, larceny, street crime are committed within walking distance of stations in a prosperous community including UWI St Augustine.

Top ten budget takeaways

Here are ten of the main takeaways from the four-hour-long presentation by Minister of Finance Colm Imbert of the 2023/2024 budget in Parliament

1. Total revenue $54.012 billion. Total expenditure $59.209 billion. Fiscal deficit $5.197 billion. The oil price is estimated at US$85 per barrel, and natural gas at US$5 per MMBtu.

2. Education and training get the largest chunk of the pie, with $8.022 billion. 2,400 laptops are to be distributed and a $1,000 book grant distributed to students in need. The health sector gets $7.409 billion, followed by National Security, with $6.912 billion.

3. The minimum wage has been increased by $3 to $20.50 per hour from $17.50 per hour. This will take effect on January 1, 2024.

4. $1 billion in back pay will go out by Christmas for 37,000 public-sector workers who accepted the four per cent wage increase offered by Government.

5. The Commissioner of Police will be ordered to triple the annual intake of new recruits from 300 to 1,000 for 2024. Police will also be given $80 million more for new vehicles and equipment to increase their presence in communities.

6. The fuel subsidy may reach $1 billion in 2024. There will be no hike in prices.

7. Property tax will be collected in 2024.

8. The Government plans to tackle the foreign-exchange crunch.

9. The unemployment rate declined to 3.7 per cent between April and June 2023, from 4.9 per cent from January-March 2023.

10. No increase in existing taxes to citizens.

Clarke Energy

Alex Marshall group business development and marketing director-US, Clarke Energy and Harriet Cross British High Commissioner at the residence of the British High Commissioner, Maraval on September 29 – Photo by Jeff K. Mayers

Clarke Energy, with its global head office in the UK, introduced itself to business stakeholders in TT such as National Flour Mills, the TT Manufacturers Association and other organisations.

Alex Marshall, group business development and marketing director for the US told stakeholders that Clarke Energy operates in 28 countries across the world supporting the transition to net zero carbon.

Historically their largest markets have been in the UK, France and Australia but they have expanded to countries in Africa and South Asia including Bangladesh and India, and they have also entered markets such as French Guiana, Martinique and Guadeloupe.

“One of the biggest opportunities for us here in TT is energy efficiency to ensure we use even fossil fuel gases to maximise the resources of a country,” he said.

The company manufactures gas-powered engines that use a combination of heat and power for efficient and renewable energy.

He said the engines can convert almost any form of gas, from biogas generated from waste material, to natural gas, to electricity.

“Our proposition (for TT) is simple – we can reduce utility bills and use your resources as efficiently as possible.”

The engines can also conduct a localised capture of carbon, and return it to food-grade standards for carbonated drinks. The engines can also be upgraded to operate on hydrogen.

Troy Heeralal, director of business development and corporate services at Advance Tech Services Ltd said he has been working with the company since 2016, in an attempt to connect Clarke Energy with TT.

“In Advance Tech we are very focused on renewable energy in TT, and as a result we select potential partners who can contribute to a greener TT.”

He reminded the stakeholders of TT’s ratification of the Paris Agreement and the commitment to reduce carbon emissions.

“What we are here to do is reach out to the other industries to see how you can fit in and play a role in contributing to that commitment.”

Clarke

Making best use of energy

Despite the push to transition to clean energy and reduce carbon emissions, fossil fuels such as natural gas are going to be around for a while. Natural gas in particular is considered a transition fuel which will take people from fossil to renewable energy with the lowest carbon footprint. Using natural gas reserves at their highest efficiency would then be best for TT, which uses natural gas for power and energy as well as manufacturing several petrochemicals for export.

This is where Clarke Energy sees itself as being beneficial to TT. Alex Marshall, group business development and marketing director of Clarke Energy said,

” (Because of) the fact that TT is a developing nation with an availability of gas, we can provide huge opportunities for energy efficiency for TT. You can do so much more with the energy that you have locally.”

Fossil fuels have a role to play in the short to mid-term and could be considered a transition fuel to go from fossil to renewable energy.

“If you bring in large amounts of solar and wind, you will still have to balance that energy with batteries or hydrogen, but there is certainly a transition point for natural gas. The important thing is that we use it efficiently, that we don’t waste it and we don’t generate electricity with low efficiency and we take the opportunity to take the CO2 out of the equation.”

Clarke Energy is an award-winning global company that can engineer, install and maintain distributed energy solutions to maximise an area’s output from various forms of gas.

“We are talking about true gas, so bio gas, natural gas, hydrogen, as well as flare gas, which could be a waste product.”

TT uses single-cycle gas turbines to generate energy. Natural gas is burnt and the heat energy is released and used to produce steam. The steam turns a turbine connected to an electrical generator which produces electricity. Single-cycle turbines can generate from 100-300 MW of power, but in the process can lose a lot of energy through wasted heat emitted from the turbine. Turbines operate at somewhere around 30-40 per cent efficiency.

Marshall said Clarke Energy’s engines, although smaller than the turbines that TT currently uses, can deliver greater efficiency. They operate typically in the 1-100 MW size range but can operate at up to 90 per cent efficiency. He said this could be pivotal for TT, given its continuing search for energy reserves and its mature gas fields being used at the moment.

“If you have a centralised turbine, you will lose energy moving the electricity from point A to B. Then you have losses associated with not using the fuel. “If you use the energy closer to the site of use, you can be about 40-45 per cent efficient. Then you can recover about 40 per cent of the thermal energy, which gives you 90 per cent efficiency,” he said.

The company’s latest efficiencies could convert energy to nearly 100 per cent capacity with a combined generation system he described as a quad generation – which uses an advanced gas-engine power configuration to use all the energy possible and recover carbon dioxide from the exhaust.

“That is electricity, heat and cooling and CO2 recovery,” Marshall explained.

He said the company’s CO2 recovery is closely linked to its bio gas upgrading services. Its engines process gas from sewage or landfills, separates the high levels of CO2 which come from the bio gas and turn it into renewable methane and food-grade bio CO2.

“We take the CO2, clean it to drinks-grade standards and use it in carbonations,” Marshall said.

These projects are currently done in New York and Northern Ireland. Grow with us

While TT has a great opportunity to increase the energy output of its gas reserves, Clarke Energy has an opportunity to grow as a renewable energy company.

“We see the opportunity to grow,” Marshall said. “We historically have been in gas engines, but we see the future as different – it is more complex power-generation installations involving multiple generation and storage technologies.”

Clarke Energy believes its future is in making sure these generation and storage technologies are operated and dispatched at their optimum.

Marshall explained that while oil and gas sectors have been well established, energy efficiency and renewable energy sectors still have room to grow, as does TT.

“As the country becomes more developed and you recognise the value of the environment and your fuel that would be a benefit for business.”

Marshall introduced Clarke Energy to several people in business, including leaders in the manufacturing, food and energy sectors, at the residence of the British High Commissioner .

At the event, he said historically Clarke Energy’s largest markets have been in the UK, France and Australia but it has expanded to countries in Africa and South Asia, including Bangladesh and India, and has also got into markets such as French Guiana, Martinique and Guadeloupe. It has recently broken into the US markets and has been trying to get into TT with the help of Troy Heeralal, director of business development and corporate services at Advance Tech Services Ltd.

Marshall said as a company focused on energy efficiency and renewable energy it may want to partner with other clean-energy companies already operating in TT.

“We may want to speak to these companies and use some of the content that they generate,” he said. “It depends on the market.”

NGC climate platform

2023, 09/30

The National Gas Company (NGC) launched a new online platform, the Climate Adaptation and Resilience Portal (CARP), which aims to keep citizens abreast of climate-driven changes impacting T&T.

NGC said CARP was developed with the support of Coastal Dynamics Ltd, and uses Geographic Information Services (GIS), artificial intelligence and predictive modelling to map and chart climate-related risks such as sea level rise, coastal erosion and vulnerability and maritime alerts. The portal also allows users to track temperature and precipitation, tidal information, air quality, deforestation, and even active adverse weather alerts.

Other features such as best practices for adaptation from around the world, meteorological office forecasts, a climate adaptation and resilience news feed, and linkages to other GIS systems showing global trends, make CARP a comprehensive resource for climate information and decision support, the NGC said.

Speaking at the launch , NGC president Mark Loquan, said he was proud at the launch of this portal.

“Even as we push for mitigative climate action, we need to recognise there are some impacts of climate change that we may not be able to avoid. We therefore need to begin conversations around adaptation and resilience. CARP will allow us to ignite and fuel such conversations.

“It is not enough to advise citizens of how our world is changing—we need to encourage and equip them to proactively prepare for that future. Our longterm sustainability is ultimately a function of how well we can accommodate change,.”

TRINIDAD 1