Promoting
export of energy services
Trinidad
Guardian
Port
Spain
Petroleumworld.com
08 27 06
When
T&T’s hydrocarbon resources eventually
run out, we are going to have to find other things
to sell to the rest of the world if we are to continue
to prosper and grow.
Until recently the assumption has
been that we will have to develop alternative non-energy
manufactured goods to export.
Considerable effort has been put
into supporting and diversifying the non-energy
manufacturing sector over the years, initially through
various trade protection measures, and, since the
liberalisation of our trading environment, through
export promotion and various business development
initiatives.
It is important to recognise, however,
that exports do not have to be of a physical good
or commodity and international trade increasingly
includes services that are sold to other countries.
Over the past couple of years, the
STCIC has been working with the Ministry of Trade
and Industry (MTI) and the Ministry of Energy and
Energy Industries to promote the export of energy
services.
Traditionally, the Ministry of Trade
has viewed the promotion of energy services sector
as outside of their mandate and falling under the
portfolio of the Ministry of Energy.
Promotion of energy services was
specifically excluded from the export promotion
activities undertaken by Tidco and from the business
support activities of the Business Development Company
(BDC) and the Venture Capital Incentive Programme.
Meanwhile, the Ministry of Energy
has primarily been concerned with the management
of exploration and production of oil and gas and,
through the NEC/NGC, with the promotion of major
downstream projects.
The Ministry of Energy’s activities
with respect to the energy services sector has concentrated
on the local content policy. This is a vital component
in the development of the energy services sector.
However, other necessary actions,
including ensuring that our international trade
negotiating positions support our local services
sector and facilitating export promotion, fall outside
of the Ministry of Energy’s portfolio and
have tended to rather fall between the cracks.
The STCIC has been working closely
with the two ministries to try to make sure that
this issue is resolved. Last week, the Ministries
of Trade and Energy and the STCIC jointly hosted
a workshop at Cara Suites, to address the issue
of promoting the export of energy services.
The convening of this workshop was
a clear indication that the promotion of energy
services sector has firmly made it onto the Government’s
trade agenda: a very positive development from the
STCIC’s perspective.
The STCIC believes that the energy
services sector represents one of the most important
sectors for the sustainable development of our economy,
beyond the depletion of our hydrocarbons.
This assessment is shared by a recent
study on the “Competitiveness of the Services
and Non-oil Manufacturing Sectors in T&T”
conducted by the Canadian consultants Goss Gilroy
Inc on behalf of the MTI’s “Trade Sector
Support Programme.”
This report, delivered in March
2006, identified energy services as T&T’s
only really internationally competitive service
industry.
The report identified the competitiveness
of the energy services sector as being driven by
the fact that it has had to respond to and service
a strong and demanding local market in the energy
sector. The reality if that the energy services
sector has never been protected behind trade barriers
and has always been liberalised and open to international
competition.
T&T energy service companies
are already exporting services to many other markets,
especially in the Americas.
At the workshop last week, four
different local energy service companies made presentations
on the services they export, some of the challenges
that they have faced and some of the things that
they would like to see in place to facilitate their
development.
One of the clearest messages presented
at the workshop is that success in the export market
needs to be built on a strong local base and that
there is a need to support and develop local companies
in the domestic market.
This point is emphasised in the
Goss Gilroy “Competitiveness Report”
which advocates the further development of the local
content policy in the oil and gas sector, in addition
to the development of local content rules in other
sectors (such as cultural industries).
The ability to attract and retain
sufficient skilled technical staff was another problem
area identified by exporting service companies.
The Goss Gilroy “Competitiveness Report”
recommended the provision of taxation incentives
for training in the energy services sector, for
example, allowing deductions against income at a
multiple of cost.
One of the other problem areas identified
by companies, and by Goss Gilroy, was the lack of
reliable information about potential export markets.
The Government’s trade facilitation
agencies need to be strengthened in order to support
local service companies seeking access foreign markets.
One positive development coming out of workshop
was the confirmation that the BDC’s mandate
to promote the export of services included the energy
services sector and that the MTI would ensure that
the agency was resourced to be able to supply these
services, including provision of information and
data.
In general, there is currently a
dearth of reliable data on the trade in services.
This lack of information has also hampered the MTI
in its efforts to negotiate an international trade
regime that will nurture and develop the T&T
energy services sector. An effort to address this
lack of information was initiated by the MTI at
the workshop, with the first priority to determine
which firms are currently offering what services
in T&T and which are exporting, or plan to export,
services now or in the future.
The STCIC has committed to work
with the MTI in this regard and will assist in collecting
relevant data from our members and other service
companies.
The
joint workshop last week was an important milestone
in the promotion of the energy services sector,
but considerable work still needs to be undertaken.
Trinidad Guardian
Thursday
17th August 2006
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