ExxonMobil added as a defendant

ExxonMobil local subsidiary was added as a defendant in a case brought to the Guyana High Court seeking closure of of its operations because of its  environmental impact, as La Palma volcano belches toxins, wafted by North East Trade Winds across the Atlantic Ocean towards the Caribbean Sea and Guyana.

Meanwhile, sanction-hit CNOOC plans to fund its Guyana project by raising USD 5.41 billion after international investors shy away,

Exxon and Hess can now:

1) acquire the CNOOC stake of 25% in Stabroek Block
2) Offer 5% of Stabroek to the Guyana government to guarantee energy security and revenue as a reward for excellent state cooperation.

Such an innovation will:

1) strengthen relations with the populace
2) end arguments about local content, patrimony and flaring
3) create wealth and prosperity for all stakeholders
4) support the rainforest which sequesters carbon emissions while producing world-class timber ,. conserving water resources and sustaining life.

TotalEnergies runs out of luck in  Suriname 

TRINIDAD BUDGET 2021

https://www.finance.gov.tt/wp-content/uploads/2021/10/2022-National-Budget-Presentation.pdf

Energy Madam Speaker, we are an oil and gas-producing country; but we only fully commercialized gas resources in the 1980s. We are committed to reducing our dependence on oil and subsequently gas in our drive to diversification, this being a central goal of successive economic plans since the release of the first one in 1969. We are well aware of the reasons being advanced for diversification. We wish to develop a non-oil sector and to lower oil financial dependency creating in the process a viable non-oil modern economy that can sustain relatively high levels of income; but the volatile nature of oil and gas revenues has created instability in our growth, incomes and employment. 115 As prices fluctuate, there are concomitant effects for export revenues and public finance. Indeed, the rise and falls in export revenues and public finance give rise to the public policy objective of the requirement for a more diversified economy. In this framework, a more diversified export and tax base become less susceptible to the vagaries of the international commodity market. Madam Speaker, despite this repeated objective, our oil and gas economy like many others in the global economy has not been successful at diversifying fully. There are public policy dilemmas for which there is no easy answer and for this reason I am of the view that the energy sector should not only be seen as part of the problem; but also part of the solution. I am convinced that a well-functioning energy sector can be a durable source of advantage to the producers, providing in the process some of the capital and knowledge which can support more diversified growth. The energy sector, bringing a wide range of technologies and resources into play could contribute significantly to the development of a more productive, innovative and sustainable economy. 116 In pursuing this objective we will take steps to ensure that greenhouse gasses are appropriately reduced from such energy activity under our Paris commitments. Madam Speaker, our economic reform agenda is closely tied to developments in the energy sector from which substantial export revenues and public financial resources are being derived for financing growth and development:  we are ensuring adequate investment in upstream activity, based on the current work programmes of the major oil companies: o The agreement with Shell would lead to US$945 million in enhanced revenues to the Government over the period 2018- 2027 and incremental revenues of US$118 million annually based on a new LNG marketing arrangement; o The agreement with bpTT resulted in an interim agreement for Atlantic LNG Train I, the extension of the South East Galeota License and the settlement of the gas royalty issue and NGC domestic gas shortfall. The Government realized a payment of US$71 million in respect of these issues; 117 o The gas sales agreement between Shell and NGC includes a tranche of gas at a preferential price for the Trinidad and Tobago Electricity Commission; o Nine exploration wells in nine deep-water blocks have been drilled by BHP; o The Ruby Project will provide BHP with an opportunity to deliver value by producing 138 billion cubic feet of resources in the Ruby and Delaware reservoirs by increasing production by 10,000 barrels of oil per day in 2022; o Shell’s exploration is expected to produce 240 million standard cubic feet per day at Baracuda in 2021 and 250 million standard cubic feet per day at Colibri in 2022; o bpTT has produced 350 million standard cubic feet per day in 2020 at Angelin and is expected to produce in 2021- ahead of the schedule- 276 million standard cubic feet per day at Savannah/Matapal: in 2023 135 million standard cubic feet per day are expected at Ginger Field and in 2024 150 million standard cubic feet at Jasmine; 118 o Touchtone (Primera Oil and Gas Limited) Ortoire has drilled two exploration wells with discoveries in both: Coho and Cascadura; o DeNovo is producing 475 barrels of condensate per day from the Iguana Field and is expected to produce thirty million standard cubic feet of gas from the Zandolie Field in 2022; and o EOG is projected to expand its production by about one hundred million standard cubic feet per day over the period 2022-2025, from several projects.  we are stabilizing our oil and condensate as well as gas production: natural gas production which decreased in 2020 is projected to rise in 2021 to 2.77 billion standard cubic feet and in 2022 to 3.37 billion standard cubic feet and thereafter to stabilize at 3.60 billion standard cubic feet. Oil and condensate production decreased from 71,725 barrels per day in 2016 to 56,481 barrels per day in 2020; but since then has been increasing and is projected to reach 64,000 barrels per day by the end of 2021, further increasing to 86,000 barrels per day in 2022 stabilizing thereafter around that level in the mediumterm. 119  we will use natural gas in support of diversification and renewable goals: o the NGC CNG Company Limited has facilitated the conversion of vehicles to CNG use and the construction of CNG gas stations. As at June 30 2021, we have on the road 15,300 converted and OEM-CNG vehicles and we now have fifteen refuelling stations with CNG capability available to the general public; o Renewable energy will be incorporated into the local energy supply grid in the near future. We have approved a consortium comprising bpTT, Shell and Lightsource bpTT as the preferred bidders for the 112.2 megawatts solar Photo Voltaic project. We expect that construction will commence in 2022 on the two solar Photo Voltaic plants through build-own-operate schemes, which are intended to feed power onto the national grid with 92.2 megawatts solar Photo Voltaic at Couva and twenty megawatts solar Photo Voltaic at Trincity. This project is being brought in at a cost of US$100 million and we are also developing a pipeline of projects aimed at increasing our renewable energy output; and 120  we are phasing out the subsidised consumption of fuels, with appropriate safeguards for the vulnerable groups. We are putting in place a pricing reform agenda that would lead to enhanced energy efficiency with significant fiscal benefits. Madam Speaker, in September 2021 bpTT underlined its continuing interest in Trinidad and Tobago when on the occasion of the initial production from the Matapal development, the President of the company pointed out that “natural gas will play an important role in the energy transition and to the economy of Trinidad and Tobago for decades to come… We are committed to a strong energy future in Trinidad and Tobago and this project plays a critical role in delivering that.” Madam Speaker, for that reason and following on recent exploration and successful activity on both our land and shallow marine areas we have ramped up our expectations in respect of our deep water areas. We are accordingly deeply hopeful that the next rounds of bids in 2022 will attract significant investor interest on land, in shallow water marine areas and our deep water marine areas: 121  the first bid round will be for deep water and will comprise eleven deep water blocks;  the second bid round will be for onshore activity and will comprise 12 blocks; and  the third bid round will be for the offshore shallow water where there are twenty-five open shallow water blocks for consideration; interestingly thirteen of the blocks have been the source of recent natural gas discoveries. Madam Speaker, it is well known that Trinidad and Tobago is a mature oil province. Indeed there is a strong argument that the first oil well ever drilled anywhere in the world, which produced oil, was drilled in 1857, 164 years ago, to a depth of 280 feet by the American Merrimac Company in La Brea (Spanish for “Pitch”) in southeast Trinidad. For some time now, we have been advised that we should review our energy taxation regime to remain competitive, especially because of recent significant oil finds in neighbouring countries. 122 It goes without saying that “discovering, developing, exploiting, and decommissioning” an oil or gas field can cost hundreds of millions of dollars and take decades. Oilfields are unique and expensive investments, therefore. Furthermore, the costs involved in developing an oil or gas field are largely incurred at the beginning of the project, before the earning of any income, and are thus sunk costs. These facts are central to the development of tax policy in the energy sector since at the beginning of an oil or gas field development project, there is significant uncertainty as to the outcome, i.e. no guarantee that oil or gas will be found in commercially viable quantities. If investors believe that the balance between risk and reward is unfavourable, i.e. that the taxation regime is skewed in favour of the Government, not “fair” or not economically feasible, or that the Government may capriciously reverse incentives and eliminate tax concessions, they will simply not participate. 123 In that context, in collaboration with the Ministry of Energy and Energy Industries, the Ministry of Finance will very shortly conduct a comprehensive review of our oil and gas taxation regime to ensure that Trinidad and Tobago remains an internationally competitive hydrocarbon province. We intend to review the appropriateness in today’s environment of our three main petroleum taxes, namely Petroleum Profits Tax (also known as Corporation Tax in this Sector), Supplemental Petroleum Tax and Royalty, both onshore and offshore, in the deep water and shallow water, and for large and small producers. We shall also examine the relevance of the existing suite of fiscal incentives, licensing regimes and production sharing contracts, in terms of providing sufficient motivation for oil and gas companies to bid for blocks and engage in exploration and production, while at the same time ensuring that the citizens of Trinidad get their fair share of revenues from our natural resources. Simply put, oil or gas in the ground is of little practical use to anyone. It must be produced and sold profitably, and the profits derived from its sale shared equitably, to have any intrinsic value.

 Fuel Liberalization
Madam Speaker, we have designed a credible and reliable pricing system for fuels within which the fuel market could be finally liberalized. We had made this commitment one year ago with the broad framework being:  removal of fixed retail margins for premium gasoline, super gasoline and diesel with petroleum retailers and dealers being allowed to fix their margins for these petroleum products;  keeping wholesale margins fixed by the Government for all liquid petroleum products;  applying an appropriate but reasonable tax to compensate for the fuel surplus, which is generated on the sale of gasoline, when oil prices are depressed; 57  the Ministry of Energy and Energy Industries posting the marketbased wholesale prices of premium gasoline, super gasoline and diesel on the first day of each month, except for the price of kerosene and Liquefied Petroleum Gas (LPG) which will remain under the subsidy mechanism; and  the Government setting a Retail Margin ceiling for each petroleum product to minimize price fluctuations and protect the end consumers of premium gasoline, super gasoline and diesel. Madam Speaker, since that time the legislative amendments to the Petroleum Act and the Petroleum Production Levy and Subsidy Act required to implement the liberalization of the fuels market, were finalized in the Finance Act 2021. The legislation was assented to in July 2021. We are now completing the design of the infrastructure within which the commencement of the liberalization of fuel prices could be initiated, with due regard to the impact of fuel prices on the most vulnerable in society. I will address the Government’s plans to assist lower-income groups to offset any increases in fuel prices, among other things, such as utility rates, later on in my speech

Public Utilities
Madam Speaker, for many years we have made substantial expenditure on our public utilities systems whether they relate to water supply, sewage treatment, electricity and public lighting systems; yet, in some areas, in particular water supply, the large expenditures have not been enhancing our quality of life. We have been reviewing our public utilities system and we are committed to ensuring that we have in place an efficient, costeffective and reliable water and waste water service and a sustainable and affordable electricity supply. A major driver of sustained economic development is reliable electricity services covering the length and breadth of Trinidad and Tobago. While we have made significant investments over the years in electrification programmes, there are still gaps in consumer access in particular in rural communities with unserved and underserved areas. We are targeting groups in these areas. We are assisting them in the re-wiring of their homes, in particular low-income households with household income not exceeding $7,000 per month, social welfare beneficiaries, senior citizens and victims of natural disasters. 111 We have also made substantial investments in electricity infrastructure to meet the growing electricity demand for usage and safety. Street lighting and the illumination of public spaces are continuing; the full dispatch of the 720 megawatts from the Trinidad Generation Unlimited plant onto the national grid is strengthening supply reliability and in Tobago expanding supply is emanating from the 20 megawatts in the Cove Power Plant. Madam Speaker, we are looking forward to the results of the tariff review commenced by the Regulated Industries Commission for the period December 2021- December 2026. We expect that the financial viability of the Trinidad and Tobago Electricity Commission will be ensured with the prices reflecting the efficient cost of production; the utility will improve its service and consumers will efficiently utilize the service. Madam Speaker, we have been improving the water sourcing and transmission network to bring relief to the citizens of Trinidad and Tobago, the majority of whom are receiving water less than 7 days per week. We are making efforts to improve the water supply in those communities where the water supply is non-existent or less than 3 days per week. 112 Several infrastructure projects have been completed with supply improvements in Champs Fleurs, Fyzabad, Santa Flora, Palo Seco, Diego Martin, Sangre Grande, Vistabella and Point Fortin. These projects are bringing water to 65,964 beneficiaries. Madam Speaker, I am pleased to advise that the task of repositioning WASA is very much on course. The Board of Commissioners is in the final stages of completing a Transformation Plan to establish WASA as a modern, technology-driven water management company that efficiently delivers water and wastewater services to the population. An integral element of the Plan is the design of a new functional and organisational structure for WASA with supporting operational systems which incorporate the use of modern technologies, and a new business model in which Government invests in capital and infrastructure and WASA meets its operational expenditure by 2024. Implementation of the Plan will commence in Fiscal 2022 and will progress over the next three (3) years. Already, the Board has made good progress in cutting expenditures on discretionary cost items and reengineering some deeply entrenched systems of operational planning, financial management, and settlement of liabilities to contractors or suppliers. 113 We are looking forward to the results of the rate review for WASA for the period December 2021 – December 2026 and we would put in place a framework at the centre of which will be enhancing the quality of life of our citizens with a guaranteed daily supply of water. It is to be noted that water rates have not been adjusted in Trinidad and Tobago since 1993, 28 years ago.
Estimates of Revenue and Expenditure 2021-2022
Madam Speaker, the COVID-19 pandemic has had a significant impact on oil prices. The various benchmark prices started strong in 2020 averaging approximately US$64.00 per barrel in January 2020, but they plummeted in the second quarter closing at nearly US$9.00 per barrel in April 2020 when the price of West Texas Intermediate fell into unprecedented negative territory. Prices recovered and by June 2020, Brent prices averaged above US$40.00 per barrel; this price increased to US$50.00 at the end of 2020. Since that time prices have fluctuated in a rising trend reaching US$71.00 per barrel by August 2021 in the context of rising oil demand consequent on increasing COVID-19 vaccination rates and economic activity. The Organization of Petroleum Exporting Countries (OPEC) and partner countries have also contributed to the evolving trend in crude oil prices. In 2020 OPEC had cut oil production due to decreased demand during the pandemic. It has been gradually increasing oil output in 2021 and it has indicated that it will continue to do so until the production downward adjustment has been phased out. 146 Madam Speaker, oil prices have become extremely volatile and difficult to forecast; but we have been reviewing consistently the in-depth analyses undertaken by the international institutions and the US Energy Information Administration on the outlook for oil and gas prices. These institutions are forecasting oil prices to stabilize at approximately US$66.00 per barrel during the period 2022-2024. Natural gas prices have been going through the roof recently, crossing $5.00 per MMbtu in the US and $20 per MMbtu in the Far East, but we have chosen to be conservative. To that end, we have decided that our assumptions for oil and gas prices are US$65.00 per barrel for oil and US$3.75 per MMBtu for gas for our Budget 2022. As a result, of these assumptions:  Total Revenue $43.333 billion  Total Expenditure $52.429 billion  Fiscal Deficit $ 9.096 billion 147 Madam Speaker, based on these assumptions and estimates we are projecting: Total revenue $43.333 billion Oil revenue $12.614 billion Non-oil revenue $29.712 billion Capital revenue $1.006 billion Total expenditure (net of capital Repayments and sinking fund contribution) $52.429 billion Fiscal Deficit $ 9.096 billion Madam Speaker, the major Fiscal 2022 allocations will be:  Education and Training $6.886 billion  Health $6.395 billion  National Security $5.664 billion  Works and Transport $3.577 billion  Public Utilities $2.671 billion  Rural Development and Local Government $1.656 billion  Agriculture $1.249 billion  Housing $0.610 billion 148 Madam Speaker, in 2021 we will secure a range of financing options for the fiscal deficit. We will tap into the domestic and international capital markets as well as accessing facilities at the international institutions. Non-debt creating financing facilities are also being secured from our utilization of public-private partnerships and strategic asset sales.
Estimates of Revenue and Expenditure 2021-2022
Madam Speaker, the COVID-19 pandemic has had a significant impact on oil prices. The various benchmark prices started strong in 2020 averaging approximately US$64.00 per barrel in January 2020, but they plummeted in the second quarter closing at nearly US$9.00 per barrel in April 2020 when the price of West Texas Intermediate fell into unprecedented negative territory. Prices recovered and by June 2020, Brent prices averaged above US$40.00 per barrel; this price increased to US$50.00 at the end of 2020. Since that time prices have fluctuated in a rising trend reaching US$71.00 per barrel by August 2021 in the context of rising oil demand consequent on increasing COVID-19 vaccination rates and economic activity. The Organization of Petroleum Exporting Countries (OPEC) and partner countries have also contributed to the evolving trend in crude oil prices. In 2020 OPEC had cut oil production due to decreased demand during the pandemic. It has been gradually increasing oil output in 2021 and it has indicated that it will continue to do so until the production downward adjustment has been phased out. 146 Madam Speaker, oil prices have become extremely volatile and difficult to forecast; but we have been reviewing consistently the in-depth analyses undertaken by the international institutions and the US Energy Information Administration on the outlook for oil and gas prices. These institutions are forecasting oil prices to stabilize at approximately US$66.00 per barrel during the period 2022-2024. Natural gas prices have been going through the roof recently, crossing $5.00 per MMbtu in the US and $20 per MMbtu in the Far East, but we have chosen to be conservative. To that end, we have decided that our assumptions for oil and gas prices are US$65.00 per barrel for oil and US$3.75 per MMBtu for gas for our Budget 2022. As a result, of these assumptions:  Total Revenue $43.333 billion  Total Expenditure $52.429 billion  Fiscal Deficit $ 9.096 billion 147 Madam Speaker, based on these assumptions and estimates we are projecting: Total revenue $43.333 billion Oil revenue $12.614 billion Non-oil revenue $29.712 billion Capital revenue $1.006 billion Total expenditure (net of capital Repayments and sinking fund contribution) $52.429 billion Fiscal Deficit $ 9.096 billion Madam Speaker, the major Fiscal 2022 allocations will be:  Education and Training $6.886 billion  Health $6.395 billion  National Security $5.664 billion  Works and Transport $3.577 billion  Public Utilities $2.671 billion  Rural Development and Local Government $1.656 billion  Agriculture $1.249 billion  Housing $0.610 billion 148 Madam Speaker, in 2021 we will secure a range of financing options for the fiscal deficit. We will tap into the domestic and international capital markets as well as accessing facilities at the international institutions. Non-debt creating financing facilities are also being secured from our utilization of public-private partnerships and strategic asset sales.