Policy
for the development of energy services sector
Trinidad Guardian
Port
Spain
Petroleumworldtt.com
05 06 07
The
South Trinidad Chamber of Industry and Commerce
has recently developed a series of policy recommendations
for the development of the energy services industry
in T&T. The policy recommendations were delivered
to the Standing Committee on Business Development
on April 24. The executive summary of the policy
is outlined below and the full version is available
on the STCIC Web site.
The policy document sets out the measures that
need to be put in place to develop the energy services
sector in T&T, in keeping with the objectives
of Vision 2020. For the purposes of this policy
the energy services sector is defined as all services
contracted by the energy sector, along the entire
value chain, that involve a significant level of
technical skill or specialist knowledge.
Characteristics
The
policy outlines the key characteristics of the
energy services sector globally and in T&T.
There are approximately 300 to 400 firms which
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, including most of
the big international publicly listed energy service
firms. Most of the local firms are family owned,
though some are subsidiaries of the major conglomerates.
The energy services sector is the major employer
within the energy sector. The economic performance
of the sector in the local economy is variable,
with some years showing positive growth and others
sharp contractions. This is because the sector
is very reliant upon specific investment decisions
being taken by major customers. In other words,
demand is very lumpy.
Importance of the sector
The
energy services sector is important because it
represents the most competitive services sector
in T&T and therefore one of the most likely
services in which an export market can be developed.
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. 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.
Issues facing the sector
The sector faces numerous problems both at home
and abroad. These include the difficulties associated
with attracting and retaining key skills in a global
marketplace, rapidly increasing staff costs, increased
international competition in the domestic market,
non-tariff barriers in export markets, difficulties
in accessing major customers due to unclear health
and safety prequalification requirements, challenges
with knowledge transfer and expertise transition,
and lack of industry intelligence about upcoming
projects.
Local content policy
In the domestic market, the local energy services
sector needs to be supported through the implementation
of the existing Local Content Policy. The Local
Content Policy needs to be given regulatory backing.
Major companies operating in the sector must be
required to implement independently verified policies
and programmes to promote local content. The Local
Content Policy must also be more clearly communicated
to major companies. A system for certifying local
companies must be developed and this information
must be captured in an on-line database which can
be used as an important procurement tool by the
major customers in the sector.
Legislation should also be introduced to protect
the investments made by local agents for international
equipment and service lines. For the Local Content
Policy to be effective there must be defined performance
standards that companies can be measured against
and report on while allowing for sustainable development
through continuous improvement.
Skills gap
People
management issues need to be addressed through
the continued expansion of the University
of T&T (UTT) and the University of the West
Indies (UWI). A south campus of UTT, concentrating
on the upstream energy sector, should be established
with strong linkages to the service companies primarily
based in South.
Companies also need to improve their people management
and leadership skills. The programmes being offered
by the Lok Jack Graduate School of Business could
assist in that regard, with modifications to meet
the developing industry needs. The general business
skills of smaller local service companies also
need to be improved through dedicated capacity
building programmes.
Further, in the education and development of technical
skills, there should be a trend toward industry
driven educational programmes provided through
UTT that allows for a level of standardisation
and provide baseline skills that are applicable
across the sector. This will allow for greater
mobility of personnel across the sector and increase
the pool of skills and resources that are currently
limited.
HSE standards
The problems associated with unclear health, safety
and environmental prequalification requirements
are being addressed through an existing STCIC project,
the Safe to Work programme (funded through a grant
from the Inter-American Development Bank Multi-Lateral
Investment Fund). This unique project will create
uniform prequalification requirements across the
sector and will assist smaller local companies
in meeting these requirements.
The
existing government facility to support research
and development excludes energy services companies.
This should be amended and the limits for funding
increased. Efforts should also be made to encourage
major international service companies to site research
centres in T&T.
Trade negotiations
T&T’s energy service companies also
need support in accessing export markets. The trade
negotiating strategy of the Government and the
wider Caricom region should be reviewed to take
into account the potential exports from the energy
services sector. There are certain subsectors within
the energy services industry where T&T could
make commitments to keep its open market, especially
for the right of establishment, but also in some
cases for the movement of people on intra-company
transfers. There are other sectors in which T&T
should make no commitments on either market access
or national treatment.
Export support
The Government should also provide direct support
to encourage the export of energy services, including
the provision of market intelligence, support for
trade missions, the promotion of the services sector
and the restructuring of Exim Bank products to
meet the needs of the sector.
A
concerted effort is needed to harness the knowledge,
skills and advocacy of the wide network of T&T
nationals working in the energy sector throughout
the world. The policy calls for the development
of a global network of T&T energy professionals
and leaders.
A full version of the policy is available at www.stcic.org
Trinidad
Guardian
Thursday 3rd May, 2007
Copyright
©2007 Trinidad Guardian. All Rights Reserved.
