Oxford Business Group

From The Report:   Trinidad & Tobago 2018

Trinidad & Tobago Energy
The oil and gas industry has long been the driver of Trinidad and Tobago’s economy. In 2017 the petroleum sector accounted for 33.7% of GDP, according to the “Review of the Economy 2017” report by the Ministry of Finance. T&T plays an important role as a gas supplier for the Latin American and the Caribbean market, given that Peru is the only other exporter of liquefied natural gas (LNG) in the region. Falling global oil prices and a drop in production have spurred T&T to consider more stable sources of energy to boost its economy. However, despite increasing interest in renewables, the country is still focused on developing its natural gas segment. Upcoming gas projects, including the Dragon gas field deal with Venezula, and recent output figures are encouraging a positive outlook for the sector, with the rebound in gas production levels expected to continue on an upward trajectory. This chapter contains interviews with Franklin Khan, Minister of Energy and Energy Industries; Claire Fitzpatrick, Regional President, BP Trinidad and Tobago; and Mark Loquan, President, National Gas Company of Trinidad and Tobago.

• Buy digital edition £22This chapter includes the following articles.
• Trinidad and Tobago’s gas production increases alongside investment in sustainable energy sources
• Franklin Khan, Minister of Energy and Energy Industries: Interview
• Claire Fitzpatrick, Regional President, BP Trinidad and Tobago (BPTT): Interview
• While Trinidad and Tobago’s state-owned oil firm are restructured, private companies ramp up exploration activities
• Mark Loquan, President, National Gas Company (NGC) of Trinidad and Tobago: Interview
• Energy market challenges drive downstream innovation in Trinidad and Tobago oil
• Renewables to drive diversification in Trinidad and Tobago’s energy market

Economic Overview

With global energy prices recovering and a new natural gas project now on-line, some predict an end to T&T’s recession in 2018. In May 2018 the Ministry of Finance reported that as energy activity recovers and other sectors begin to grow, tax revenues will likely exceed expectations, and the fiscal deficit was revised down from 3.1% of GDP in 2018 to 2.5%, compared to 8% in 2017…..read more

Energy Sector Analysis

The oil and gas industry has long been the driver of Trinidad and Tobago’s economy. In 2017 the petroleum sector accounted for 33.7% of GDP, according to the “Review of the Economy 2017” report by the Ministry of Finance. T&T plays an important role as a gas supplier for the Latin American and the Caribbean market, given that Peru is the only other exporter of liquefied natural gas (LNG) in the region….read more

Regional Relations Sector Analysis

Trinidad and Tobago has played a crucial role in the integration of the Caribbean, particularly among the Anglophone countries of the region, for decades now. A promoter of the Treaty of Chaguaramas in 1973, the first step towards deeper regional integration after the mixed fortunes of the establishment of the short-lived West Indies Federation between 1958 and 1962, T&T subsequently became a founding member of the Caribbean Community (CARICOM)…..read more

Agriculture Sector Analysis

The economic recession in recent years has forced the government to closely examine its consumption of foreign goods, and to prioritise domestic production and self-sustainability.The push towards wider economic diversification has highlighted agriculture as a potential sector for transformation. While the state has shown a commitment to change, Trinidad and Tobago still has room for improvement as it continues its journey towards increased food security….read more

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NGC contributes $1m to scholarship fund

3 get Trevor Boopsingh award
IN MEMORY OF: The late Trevor Boopsingh, in whose memory, the NGC created a scholarship fund.IN MEMORY OF: The late Trevor Boopsingh, in whose memory, the NGC created a scholarship fund.
THREE youngsters are this year’s NGC Trevor Boopsingh Award winners. They are

• Renisha Hercules,
• Vikki Lee and
• Jenna-Leigh Metivier.

They were recipients of three scholarships at The UWI’s Undergraduate Awards ceremony for scholarships and bursaries held at the university’s campus recently.

The three are currently pursuing degrees in Chemical and Process Engineering as well as Environmental Sciences and Natural Resource Management.

The NGC, in a release, said this country owes its success as one of the world’s leading energy producers and exporters to the work of dedicated, pioneering individuals who led the way in the evolution of our energy industry, such as the late Trevor Boopsingh.

In recognition of the important role of Boopsingh and other pioneers in the energy industry in laying the foundation for TT’s energy industry, the NGC established The Trevor Boopsingh Energy Studies Scholarship Fund.

NGC has to date contributed $1m to this fund, which will provide support to three undergraduate and one post graduate student annually for the period 2018-2024.

As such over the 2018-2024 period, five postgraduate students will receive support for the two-year duration of their studies and 18 undergraduate students will receive support for the three-year duration of their programme.

These scholarships provided to successful candidates forms part of NGC’s Memorandum of Agreement (MOA) with The UWI that establishes the Trevor Boopsingh Energy Studies Scholarship Fund.

The MOA, for the 2018-2024 period seeks to provide financial assistance to students in the energy and petroleum sectors. Specifically, Petroleum Engineering; Chemical Engineering; Civil Engineering with Environmental Science; Environmental and Natural Resource Management; Environmental Science and Environmental Science and Natural Resource Management.

The Fund will not only assist the students financially with their academic studies but will also provide them with the opportunity to participate in NGC’s undergraduate internship programme during the July/August vacation period.

As such they will receive invaluable practical experience in the energy sector and the chance to learn from the best experts in their respective fields.

STEAM

The Petroleum Geroscience Unit of UWI Faculty of Engineering produced 12 graduates including 7 females.

Silent Night

Moody’s says TT outlook ‘stable’ but…

INTERNATIONAL credit rating agency Moody’s has held TT’s credit rating at “Ba1 stable,” in its latest update out November 1, although the country’s economic resiliency is “low.” According to the Moody’s rating criteria, though, that still puts the country at the highest tier of junk bond (high-risk) investment status.

Moody’s assessed Trinidad using four factors: economic strength, institutional strength, fiscal strength and susceptibility to event risk. TT scored “low” in the first two, moderate in the third and very low in the fourth.

Government’s fiscal strength was also “low”, while the government bond rating range was Baa3-Ba2, considered anywhere from “medium grade with some speculative elements and moderate credit risk” to “judged to have speculative elements and a significant credit risk.”

“Trinidad and Tobago’s credit profile is supported by large financial buffers, relatively high wealth levels, and significant international reserves, which limit external vulnerabilities. Those credit features mitigate credit challenges related to a policy response that has been unable to offset the impact of low energy prices on government revenue. A steady rise in government debt ratios has contributed to an erosion of sovereign creditworthiness,” Moody’s said.

The country’s credit strengths include: High income level relative to peers; financial buffers in the Heritage and Stabilization Fund and robust international reserves position

Credit challenges were: large fiscal deficits and rising debt ratios amid limited fiscal consolidation; poor quality of macroeconomic data and relatively weak policy execution capacity.

Moody’s said the stable outlook incorporates the expectation that capital revenue associated to asset sales would help reduce government borrowing requirements and lead to relatively stable government debt ratios around 6 per cent of GDP. It also captures the presence of sizeable fiscal buffers that limit downside credit risks, as well as the government’s ample access to a relatively deep domestic financial market.

 

Caricom market for fuel

The archipelago faces the pos­si­bil­i­ty of los­ing Cari­com mar­kets for the ex­port of fu­el as the price of fu­el com­ing out of Trinidad is like­ly to in­crease.

Min­is­ter of En­er­gy Franklin Khan told the Sen­ate that Cari­com coun­tries now have the op­tion of sourc­ing their prod­ucts on the open mar­ket. Petrotrin still has the abil­i­ty to sup­ply small car­goes, in­clud­ing avi­a­tion fu­el, to small Cari­com coun­tries, which gives it a strate­gic ad­van­tage. How­ev­er, with a change in the busi­ness mod­el, with Petrotrin hav­ing to im­port prod­ucts from out­side of the Cari­com re­gion, there is a pos­si­bil­i­ty of in­creas­es in prices. The Cari­com mar­ket is unique in that it calls for small pack­age sizes, so not all in­ter­na­tion­al traders can fa­cil­i­tate that mar­ket. That was the strate­gic ad­van­tage of Petrotrin. How­ev­er, there are oth­er play­ers in the mar­ket.

“We have gone in­to a free mar­ket sit­u­a­tion. We are im­port­ing fu­el for re­dis­tri­b­u­tion to Cari­com (and) they have the op­tion to con­tin­ue with Paria or Petrotrin as the case may be, and there is no CET (Com­mon Ex­ter­nal Tar­iff) now on fu­el, so they can go to the in­ter­na­tion­al mar­ket and source their fu­el at the most com­pet­i­tive prices in their opin­ion,” Khan said.

The CET does not ap­ply any­more as T&T is no longer in the re­fin­ery busi­ness.

Bar­ba­dos an­nounced that it has found a new sup­pli­er for pe­tro­le­um prod­ucts. It has al­so been re­ceiv­ing spot ship­ments of gas from the Unit­ed States.

The min­is­ter said no one com­pa­ny will be giv­en ex­clu­sive rights to sup­ply prod­ucts to T&T. In­ter­na­tion­al traders, re­fin­ers, and mar­keters will be in­vit­ed to par­tic­i­pate in the sup­ply of re­fined prod­ucts, with the com­pa­ny with the most com­pet­i­tive be­ing award­ed sup­ply con­tracts. Those prod­ucts will in­clude jet fu­el, gas, oil and un­lead­ed gaso­line.

BP’s Latin Amer­i­ca In­te­grat­ed Sales and Trad­ing Group, won the con­tract to sup­ply re­fined prod­ucts fol­low­ing a com­pet­i­tive bid­ding process. He said the com­pa­ny’s of­fer was su­pe­ri­or on price and com­mer­cial terms on the com­pos­ite car­gos

On Oc­to­ber 27 Petrotrin re­ceived its first ship­ment of re­fined fu­el, one of 16 car­goes that will be de­liv­ered in the next four months un­der the agree­ment. The sched­ule of im­port­ed prod­ucts has been de­signed to as­sure that a 20-day sup­ply of all prod­uct grades is as­sured in the lo­cal mar­ket.

Sup­plies from Jan­u­ary 1, 2019, will be sourced un­der the new Paria Trad­ing Com­pa­ny Lim­it­ed.

Liquefied natural gas (LNG) production dropped 23.2 percent year-on-year in September to 1.76 million cubic meters.
When compared to the month before, production at Atlantic LNG’s 14.8 mtpa Point Fortin facility declined 29.9 percent, according to the monthly data provided by Trinidad’s Ministry of Energy.

 

September LNG production marked the first monthly decline this year for Trinidad.

Liquefied natural gas (LNG) production dropped 23.2 percent year-on-year in September to 1.76 million cubic meters.

Compared to the month before, production at Atlantic LNG’s 14.8 mtpa Point Fortin facility declined 29.9 percent.

Gas production also dropped 11.5 percent in September, averaging 3.16 Bcf/d, marking the first monthly decline since October last year.

LNG production at the Point Fortin liquefaction facility located in southwestern Trinidad started to pick up last year helped by new upstream gas developments such as BP’s Juniper project and the onshore compression project, reversing the negative trend in domestic natural gas production and boosting LNG production at the country’s sole facility.

LNG sales and deliveries from the Atlantic LNG export facility came to 41.8 million MMBtu in September, a drop of 10.3 percent on year.

Atlantic LNG is owned by BP, Shell, China’s sovereign wealth fund CIC unit Summer Soca and Trinidad’s state-owned company NGC.

Petroleum Dealers’ Association

No problem with fuel
Motorists feel like they’re almost running on empty more frequently, but president Robin Narayansingh, says at least on his end, that’s not true.

Since October 1, super gasoline prices have increased by $1, as announced in the 2019 national budget—or 25 per cent. This could be why people seem to think their gas is burning out faster, Narayansingh said, because they’re paying so much more than they’re accustomed to paying.

Pumps and other equipment are regularly inspected by National Petroleum (NP, which owns the majority of gas stations in TT and is the only legal distributor of fuel), as well as other independent bodies, including the TT Bureau of Standards. The equipment also has special tamper-proof seals, so if anyone tried to interfere, it would be readily apparent, he said. Checks are made at least every six months to a year, and even more frequently if there seems to be unusual or significant movement.

For Narayansingh, though, the bigger problem is that independent gas station owners are locked into a business over which they have no control, because margins are set by the state. “There no way to move out. It’s like planned poverty for some of us,” he said.

For each litre of super and premium gasoline, gas stations make 22 cents, and for diesel and regular (gasoline with a lower octane or compression level) fuel, it is 17 cents per litre.

 

OBITUARIES
Haseena Ali,  74

National award winner, recipient of a Public Service Medal of Merit (Gold) award in 2012, Mrs Ali had a long and distinguished career in tax auditing, administration and policy. She also served on the Board of Inland Revenue as a commissioner and later as chairman. A member of the Salary Reviews Commission, she was a director on the board of the National Gas Company.

Joanna Banks

The cyclist, aged 40, a manager at BPTT operations, died after being was thrown into a ditch by the impact of a fatal collision with a car which drove into a group of cyclists on the Beetham Highway.