Opinion
- Editorial- Commentary
STCIC
: Exporting energy services
The energy services sector is the most competitive
services sector in the local economy, according
to a Ministry of Trade sponsored study conducted
last year. Energy services are therefore one of
the most obvious sectors to be targeted for the
development of exports from T&T and the STCIC
has been working with the Government to develop
potential export markets for the local energy services
sector.
The
development of the energy services sector will
enable T&T to continue to be involved
in the energy sector even after all our hydrocarbons
have been depleted; as the export of services from
T&T is not reliant upon hydro-carbons being
extracted here.
T&T nationals already have an excellent reputation
in the energy sector. This can be leveraged to
build the reputation of T&T service companies.
The STCIC has outlined a policy proposal for the
development of the energy services sector entitled, “Playing
to our Strengths” in recognition of the fact
that the sector is one of the strongest sectors
within our economy. A copy of the policy paper
can be downloaded from our Web site at www.stcic.org.
Within the Caribbean region the major potential
markets for energy services are not very large,
but still offer prospects that should be actively
explored.
Both
Suriname and, to a lesser extent, Guyana offer
existing markets for energy services exports
from T&T. But perhaps, more importantly offer
the potential for significantly larger markets
in the future.
In recognition of this fact the STCIC will be
leading an energy services mission to Guyana and
Suriname later this year.
What is the energy
services sector?
The energy services sector consists of all services
that are contracted out along the entire value
chain of the energy sector, stretching from conducting
seismic surveys, to drilling exploration wells,
through the design and installation of oil and
gas platforms, to the maintenance and operation
of downstream petrochemical plants.
Many definitions of energy services also include
the transport and distribution of oil, gas and
petroleum products and some include the generation
and transmission of electricity.
However,
in the case of T&T, the Central Statistical
Office (CSO) measures “Petroleum Sector:
Service Contractors” as a separate sector
to distribution and transport of gas and petroleum
products and the generation and transmission of
electricity.
Using
the narrower definition used by the CSO, Energy
Services contributed 2.5 per cent to the
total economy. Although this figure is small, the
T&T energy services companies have stood the
test of time and can compete with the best of the
best in the international energy services industry.
A number of local energy service companies are
already successfully exporting services.
There
are approximately 300 to 400 firms who comprise
the energy services sector with a few large to
medium-sized firms and a large number of small
companies. There are a large number of foreign
owned companies in the energy services sector in
T&T, including most of the big international
publicly listed energy service firms.
T&T
have had to compete against these international
companies for many decades without the benefit
of any trade barriers or government support, which
largely explains their current competitiveness.
Most of the local firms in the sector are family
owned, though some are subsidiaries of the major
conglomerates.
The energy services sector is the major employer
within the energy sector employing about one third
of energy sector personnel.
The
T&T energy services sector has been exporting
services for many years, with local firms establishing
a presence in a number of different markets across
the hemisphere and further afield.
Trinidadians have developed a very good reputation
in the energy services sector, especially in services
around drilling exploration and development wells.
This,
coupled with the reputation T&T has
developed in the successful development of gas
reserves to build a strong downstream petrochemical
sector means that T&T has a potentially strong “national
brand” in the energy sector. This can be
harnessed in order to develop the export in energy
services.
Exporting energy services to Guyana and Suriname
Two potentially important markets in the region
are Guyana and Suriname. While neither country
has a well developed hydrocarbon sector today,
both offer significant potential.
A study of the Guyana/Suriname Basin conducted
by the US Geological Service in June 2000, estimated
that some 15.2 billion barrels of oil is estimated
to exist underground. This area is also believed
to have the second highest resource potential for
an unexplored basin.
Another assessment made by the Guyanese Office
of Investment estimates that large deposits of
oil and gas lay offshore (2.2 billion barrels and
6 trillion cu ft/ 28.3 billion+ cubic metres respectively).
Unlike
Guyana, which has no current production, Suriname
produces about 12,000 barrels of oil a
day. Statsoolie is the national owned oil company
that operates the only two producing fields in
the basin—Tambaredjo and Calcutta—both
of which are located onshore. They also sell petroleum
products to their Caricom neighbours. Both countries
are now looking to expand their exploration efforts
for oil and gas.
Exploration to develop this potential new hydrocarbon
area has been constrained by a boundary dispute
between the two nations which has meant that they
have been unable to offer attractive exploration
acreage to international companies in the area
around the disputed maritime boundary.
A
resolution of this dispute is expected very soon
from the UN Tribunal assessing the relative
claims of the two nations. Once this resolution
is determined is expected that both nations will
increase their exploration efforts, resulting in
significant new opportunities for T&T companies.
Given
the advent of the Caricom Single Market and Economy,
T&T companies will have significant
advantages in accessing these markets compared
to extraregional service companies, especially
with the free movement of skilled personnel and
right of establishment.
Given this potential, the STCIC has determined
that this would be a good time to actively explore
the opportunities in Suriname and Guyana. We are,
therefore, organising a trade mission to the two
countries in October 2007.
If
any member would like to get involved in the
mission please contact the STCIC as soon as possible.Feedback
can be sent to Deven Basdeo at deven@southchamber.org.
/ www.stcic.org
STCIC is The South Trinidad Chamber of Industry and
Commerce.
Petroleumworld not necessarily share these views.
Editor's
Note: This article was first publish in Business
Guardian, Thursday
28th June, 2007.
Petroleumworld reprint this article in the interest
of our readers.
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Petroleumworld
07/01/07
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