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With
the world economy forecasted to enter recovery mode this year, and as
the energy sector of Trinidad and Tobago continues to have direct
relevance to the future economic growth and sustainable development of
the economy of this country, the Government is seeking to encourage
increased local oil production to ensure that the energy sector is more
balanced. As the state owned oil and gas producing Company, Petrotrin
plays a crucial role in ensuring that local oil production is boosted.
This
statement was made by Senator the Honourable Conrad Enill Minister of
Energy and Energy Industries when he delivered the feature address at
the South Trinidad Chamber of Industry and Commerce’s Annual Energy
Conference held under the theme “Energy and Entrepreneurship” at the
Hyatt Hotel on January 25th.
In his
address, Minister Enill noted that as the global economic recovery
continues, the world oil market is projected to gradually tighten in
2010 and 2011 and that analysts have projected that crude price would
continue to increase over the next two years.
“Although global oil inventories and spare production capacity remains
very high by historical standards, expectations of a continued global
economic turnaround have continued to support oil and market prices,” he
said, adding that the energy sector of Trinidad and Tobago continues to
have direct relevance to the future economic growth and sustainable
development of the country, particularly since it accounted for
approximately 48% of GDP in 2009.
“Our
objective as a Government is to maximise our revenue potential
(Especially that which is generated by the energy sector); to create
wealth and to encourage greater distribution of this wealth for the
benefit of our population,” he stated. “In energy, the platform for our
further development is being carefully constructed and with the widest
possible involvement designed to create activity in the sector. Our
focus at this time includes: The revised Fiscal terms designed to
stimulate activity; the priority use of gas resources; the ability of
Petrotrin to boost local oil production and; our renewable energy
agenda.”
Minister Enill stated that Government had completed the review of the
fiscal system and was awaiting comments from the industry.
Outlining some of the Government’s proposals, he said, “The production
sharing contract remains our preferred form of arrangement that will be
offered to potential investors under future competitive bid rounds. Our
new PSC will be similar to the 1995/6 models in which companies were
allowed to evaluate their risks and offer an adequate share of Profit
Petroleum. This is intended to reduce some of the inherent risks and
encourage potential investment.
“With
respect to the concessionary arrangements, emphasis is placed on those
areas and activities where incentives for revitalisation and
sustainability are required, such as in the mature offshore oil acreages
and on land where enhanced oil recovery projects are undertaken.
Specifically, the incentives will directly impact on the Supplemental
Petroleum Tax Rates that will be payable by companies. In so doing, it
will provide companies with additional financial flows to re-invest in
the upstream sector.”
Minister Enill maintained that this new regime addressed small, mature
fields and tail end production and would allow for a situation intended
to encourage new investment while allowing current production levels to
be sustained.
He
further stated that the Government recognised that oil production was on
the decline and that the country had become gas based.
“However, we would like to encourage a mix that is more balanced,” he
said. “We believe that Petrotrin has an important role to play in
delivering on this objective and we have challenged its leadership to
organise in such a way as to support this requirement for increases in
oil production.”
He
noted that Petrotrin had begun to deliver on this mandate.
“As you
know seven sub-licences for fields located in eastern Trinidad were
granted in October of last year,” he said. “I am advised that three of
the Service Contracts have been signed and work is about co commence and
the other four will be signed by the end of January 2010. We anticipate
that gains in production volumes will be realised from this
initiative.”
He
stated that Petrotrin had also been mandated to develop a program for
the efficient and effective management of the Trinmar asset.
“Petrotrin will also be acquiring a 3D seismic programme over its assets
in the North West District and API’s Oropouche farmout area of South
Trinidad in February 2010 and that world would be completed by December
2010. The survey is intended to guide the future exploration on land and
is intended to result in the identification of more oil drilling
locations,” he said. |
