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While seeking to encourage investors’ involvement in the local energy sector, Minister Energy and Energy Industries Senator the Honorable Conrad Enill has acknowledged that the timeline for downstream projects may have to be revised in light of the current economic climate. 

But while he revealed that two companies, faced with the challenges of accessing investment, have announced their withdrawal from 2005/2006 Bid Rounds, the Minister maintains that investors are still showing confidence in the country’s oil and gas sector. 

Minister Enill

Minister Enill made the statement while delivering the feature address at the Trinidad and Tobago Petroleum Conference 2009, hosted by the South Trinidad Chamber of Industry and Commerce in collaboration with the Geological Society of Trinidad and Tobago.

In his address, Minister Enill referred to the changed economic environment, which has resulted in the lower demand and prices of products including crude oil and gas. 

Of our local economy, Minister Enill says, “The optimism once clearly visible is being replaced with extreme modification; the citizens who must become more cautious in their spending habits, the business sector who must now become more prudent in investment decisions. This effect has not escaped the energy sector.” 

He stated that Trinidad and Tobago has suffered a loss of revenue as the prices of our major exports- oil and petroleum products, ammonia, urea, methanol and steel have fallen considerably on the world market. 

“Additionally, due to decreased demand worldwide, there have been a number of temporary plant closures as well as reduced output at Point Lisas, further aggravating our already declining revenue pool,” he said. “This situation is compounded by the reduced sales of natural gas at the industrial estate.” 

Noting that international credit for large industrial projects has become increasingly difficult to access, Minister Enill stated that in light of the current situation, the time line for several downstream projects might have to be revised.  

“This can affect our upstream sector, including our plan to launch a bid round in the first quarter of 2009,” he said. 

The Minister revealed some of the Government’s plans to address the existing situation in the local energy sector. 

“The Government of Trinidad and Tobago will embark on implementing a fiscal regime that offers greater flexibility during fluctuating price changes,” he said. “Revitalizing the energy sector is crucial to our stability.” 

Noting that this forecast is subject to wide margins of error due to current fluctuations in the global environment, Minister Enill said the Government anticipated that energy sector growth would probably remain flat in 2009 while non-energy sector growth could be less than it was in 2008. 

And in spite of current conditions, he said the Government would continue to promote and sustain the continuing development and diversification of the energy sector. 

“Fortunately for us we have already begun the process of reviewing the competitiveness of our current fiscal and licensing regime that takes into consideration making several changes to it including, flexible fiscal terms for deep waters, marginal fields and tail end production, a new regime for ultra heavy oil, greater clarity to the bidding process, shorter time for processing of bids and removal of complexities in the system,” he said. “Notwithstanding, the financial environment, these terms would foster greater exploration activities in new areas and attract investment.” 

Minister Enill also announced that the bid round would be launched following the completion of this fiscal regime. 

Boasting that Trinidad and Tobago has always maintained a competitive edge in terms of attracting international investment in the oil and gas arena, Minister Enill quoted the Business Monitor International 2007/ 2008 Report, which put Trinidad and Tobago with a new business environment rating of 53.7, among the leaders in the Latin America and Caribbean regions, and 58^th worldwide. 

He urged investors to continue energy sector projects even though oil and gas prices are low. 

“Energy sector projects have long gestation times consequently there is need for planning and implementation of projects, even in times of low prices so that when the upswing occurs, we are in a position to take advantage of it. We expect that prices will rebound in the near future and we are therefore creating the necessary circumstances where we can take off the minute this occurs,” he said. 

In the meantime, the Minister called for higher productivity in all spheres of operation and appropriate levels of restraint. 

“This is the key to our survival and success in these difficult times when developed nations are already in a tailspin,” he said. 

The Trinidad and Tobago Petroleum Conference 2009 was held at the Hyatt Regency, Port of Spain on February 2^nd and 3^rd. Petrotrin was a sponsor of the event.