PORT OF SPAIN, Trinidad, CMC – The Energy Chamber of Trinidad and Tobago says as a mature energy producer, Trinidad and Tobago cannot afford to believe that investors have no other options, as it reported that over the last 20 years, the revenue received from the energy sector has seen significant annual fluctuations.
The Energy Chamber said that even within major oil and gas companies, Trinidad and Tobago must justify its capital projects, so the fiscal environment needs to be attractive and encouraging.
“In today’s energy industry, there are newer and more exciting jurisdictions for energy development. This means that Trinidad and Tobago has to do more to encourage the flow of capital to the country, since the risk and returns may be better elsewhere.”
The Energy Chamber said that as the country prepares to hear the national budget later on Monday, “there are a few things that urgently need to be addressed: the supplemental petroleum tax, accelerating capital allowances, and reducing the amount of VAT (value added tax) refunds owed to the energy sector”.
It said that these are critical pain points that companies continually raise in reviews of the fiscal environment, and they have not been fully addressed to date.
The Energy Chamber said that while there has been fluctuation in the revenue from the energy sector over the past two decades, the general pattern has been that revenue received over the last 10 years, 147 billion dollars (One TT dollar=US$0.16 cents), has been considerably less than the revenue received during the previous decade of TT236 billion dollars.
The chamber said that two critical factors affect the revenue earned from the sector.
It said the first is the price of commodities, and it must always be remembered that the cost of energy products produced in the country is determined by external factors, primarily driven by demand and supply.
“Trinidad and Tobago by itself cannot influence the price of oil, natural gas, or LNG,” the Energy Chamber said, noting that in previous statements it had shared how the prices for natural gas and LNG are derived and that foreign traded markets primarily drive these.
“This is important to note, since these external factors play a major role in the price received for the different commodities, which therefore impacts the revenue earned by the central government. When prices are high, logically, the revenue earned will be higher than when prices are low.”
The Energy Chamber said that in 2022, when Russia invaded Ukraine, prices of LNG and natural gas increased significantly because Europe tried to stop buying Russian pipeline gas and bought gas from elsewhere, including LNG from Trinidad.
“This considerably shifted energy dynamics in the region, resulting in rising prices, which benefited countries like Trinidad and Tobago, which supplied some of that demand.
Conversely, during a low-price period, such as in 2020, global demand for fuels decreased due to restrictions on the movement of people caused by COVID-19. This resulted in low demand and, therefore, low prices. Trinidad and Tobago was not immune to these effects and consequently saw a substantial drop in revenue that year.”
The Energy Chamber said that while price is a significant component, it works hand in hand with the volume of the products being produced.
It said the second “critical” issue affecting revenue is the domestic production, noting that over time, the production of oil and gas from Trinidad and Tobago has fallen dramatically.
“In the early 2000s, energy revenues would have risen sharply due to the increasing production of natural gas. However, the production of natural gas in 2025 is now almost half of what was produced in 2014. This is a significant hurdle in terms of revenue.
“This means that even when prices are high, production is much less, so the potential boost in revenue is not fully realized. It also means that when prices are low, the effects are felt more severely since less would be earned on lower production.”
The Energy Chamber said that the fall in upstream production also means there is less production in the downstream sector for LNG, methanol, and ammonia, adding that ‘these three commodities play a significant role in the country’s ability to earn foreign exchange through their export.
“It is important to note that while prices are not within the control of the government, there are ways for the government to impact production. This means creating the environment to encourage investment in the energy sector,” it added.
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