PORT OF SPAIN, Trinidad– The Trinidad and Tobago government Tuesday said it is conducting a comprehensive review of the oil and gas taxation regime to ensure that the country remains an internationally competitive hydrocarbon province.
The three-day conference, organized by the Energy Chamber of Trinidad and Tobago, is being held under the theme “Leveraging the industry’s strengths for the energy transition.”
Prime Minister Dr. Keith Rowley, delivering the feature address at the opening ceremony of the 2022 Energy Conference of Trinidad and Tobago, said that the review encompasses capital allowances, petroleum profits tax, supplemental petroleum tax, and royalty both onshore and offshore, in shallow water and deep-water.
As we move to identify new resources, we must manage available resources. COVID-19, low commodity prices, and technical issues have setback levels in oil and gas production. However, with the ease of the pandemic and new activity, both oil and gas production is set to rise.
Rowley told delegates with new production coming onstream in 2022 and 2023; gas production is projected to increase from present levels to 3.2 trillion cubic feet by 2024.
He said gas supply between 2024 and 2027 will be tight before improving in 2028 with the coming onstream of mega projects, the Manatee and Calypso.
“However, the key to a sustained gas industry will be exploring and developing our hydrocarbon resources and access to cross-border natural gas resources. Hence the aggressive bid-round program.”
Rowley said that the outlook for oil production is promising. The recent successes by Touchstone and BHP have reactivated strong interest in oil exploration both on land and offshore. He said there is currently a suite of prospects pursued by the state-owned Heritage Petroleum Company Limited (HPCL) independently or by a joint venture with significant potential.
“Apart from these activities, there is significant acreage not being exploited by Heritage. Accordingly, the company has been mandated to accelerate its programs for lease operations, farm-outs, and joint ventures to avoid the stranding of potential hydrocarbon assets.”
Rowley said that as a small island developing state, Trinidad and Tobago must engage with the rest of the world and particularly its regional neighbors as it continues to build and strengthen its economy.
“High on our agenda has been the development of economic cooperation in the energy sector. To this end, we have executed unitization agreements with the government of the Bolivarian Republic of Venezuela, the government of Barbados, and the government of Grenada, which will allow for the exploration of hydrocarbon resources in the maritime boundaries shared with these countries.”
He said that a Memorandum of Understanding (MOU) had been signed with Guyana and Haiti on cooperation in energy. In May 2020, Trinidad and Tobago signed a Protocol of Intent with Ghana on cooperation in the energy sector.
But Rowley said there is a need to move beyond the intent to co-operate and aggressively pursue opportunities that utilize Trinidad and Tobago’s extensive expertise and experience in the energy sector.
He said the local energy service companies with a significant presence in Guyana and Suriname are already at the forefront of the export of energy services. NGC and its subsidiaries, National Energy and Phoenix Park Gas Processors Limited (PPGPL), have also been actively marketing their services regionally and internationally.
Rowley said NGC made a significant breakthrough in Ghana in winning a decent contract to design, procure, construct and install a pressure regulator package at the Takoradi Distribution Station, located in Abode.
In February 2020, PPGPL, through its subsidiary Phoenix Park Trinidad and Tobago Energy Holdings Limited (‘Phoenix Park’), acquired the liquids marketing and trading business of Twin Eagle, a US-based Company. In January 2022, this was followed by the acquisition of the Texas NGL Terminal of Keyera Energy Inc, a subsidiary of Keyera Corporation, one of Canada’s largest midstream oil and gas operators.
Rowley said with this acquisition, Phoenix Park can access and aggregate LPG supply to sustain and grow its markets in Mexico, Latin America, and the United States.
“These initiatives have the potential to make a substantial contribution to the domestic energy sector and the economy of Trinidad and Tobago. They are examples of the utilization of experience and expertise within the industry to provide economic benefit to the country.
“In the same vein, by marshaling the many industry strengths, we will be able to achieve an orderly energy transition for the benefit of stakeholders. However, there is no quick fix. The energy landscape is rapidly evolving, and therefore our strategies should be geared to respond in a timely fashion to changes in the market.”
But Rowley acknowledged that in the final analysis, how the industry fares in the transition depend to a large extent on “our collective efforts.
“In this forum, we have assembled the policymakers and key industry players interested in the industry’s performance in this global energy transition. Given our vested interests, I am confident we can work together to navigate the energy transition to our mutual benefit successfully,” he added.
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