Issue
of energy security
PORT SPAIN
Petroleumworldtt.com
03 09 08
The
South Trinidad Chamber of Industry and Commerce
(STCIC) hosted the annual T&T Petroleum Conference
2008 on Monday and Tuesday last week at the Hilton
Trinidad and Conference Centre, St Ann’s.
The
Business Guardian last week published the
first half of the opening address delivered by
STCIC president Dr Rampersad Motilal. This week
the conclusion of Mootilal’s address.
The discussions on the reserves to production
(R/P) ratio have highlighted the need for this
nation to also consider other paths towards sustainable
development which may not be directly linked to
our hydrocarbon reserves.
The chamber strongly believes that the continued
development of our energy services sector will
provide one such avenue.
We
can also develop a sustainable energy industry
by exporting our energy services
to the rest of
the world. Here, within the Caribbean region, there
are potential future hydrocarbon reserves that
can be developed and T&T service companies
are well placed to take advantage of these opportunities.
Late last year we took an extremely successful
energy service trade mission to Guyana and Suriname
and a number of our members are developing significant
business interests in both countries.
Barbados has an upcoming bid-round. Production
is increasing in Cuba. Slightly further afield,
Brazil has huge potential.
For some time now, attention has been focused
on how we can develop a long-term sustainable petrochemical
industry even beyond our oil and gas. There are
a number of countries in the world which have little
or no hydrocarbon resources but have very successful
petrochemical sectors. We hope to explore this
issue further in this conference.
Local content
Building a successful export strategy relies upon
a strong industry at home and, in this context,
let me say a few words about local content.
The
chamber has advocated a number of activities
that need to be implemented in
order to support
local content in the operations of the country’s
energy industries.
These include:
1. The integration of local content regulations
with both existing and new production sharing contracts
(PSCs) as well as those operating under production
and export licenses such that there are defined
standards which must be met.
2.
Communication and dissemination of the Local
Content Policy which should be championed,
funded
and implemented by the Ministry of Energy and the
policy should be given prominence on all communications
between the Government and existing and new companies
entering T&T’s energy sector.
3. There must be independent monitoring and auditing
of local content targets and achievements by companies.
Energy security
In
order to meet its development goals T&T
needs to consider the whole question of long-term
energy security. The chamber has been advocating
for sometime now the need for the country to set
aside a tranche of gas for electricity generation
for at least the next 50 years. We also need to
more aggressively pursue the use of alternative
energy sources to complement our energy portfolio.
Stock market/
divestment of assets
There is a noticeable absence of energy companies
on the local stock exchange. We wish to encourage
the Government to establish the appropriate framework.
Some portion of the assets of local energy industries
should be divested and placed on the local stock
exchange so that citizens can participate directly
in sharing the risk and the rewards of the energy
sector. This can also be a useful mechanism for
the divesting of mature assets which may no longer
meet the returns criteria of larger players but
could still be profitable to a smaller, publicly-traded
company.
Some adjustments may be necessary to the present
rules and regulations governing the local stock
exchange to encourage greater participation by
the energy sector. In this regard, we note the
scarcity of participation by local private companies
in the upstream, mid-stream or downstream sub-sectors.
Refinery
There have been a number of statements recently
concerning the construction of a new refinery at
a cost of some US$3 to $4 billion at the Petrotrin
refinery complex site in Pointe-a-Pierre. While
investments in the local energy sector are always
welcome, this will represent the largest single
capital investment in any local petrochemical complex.
We expect to hear more from the Government on the
benefits of this investment and its plans to achieve
competitiveness and how this project fits into
the overall development plan for the sector.
On
this issue, we wish to note that the presence
of a well-managed, competitive,
refinery— which
is not necessarily reliant either on locally produced
or imported crude—can provide important feedstock
for the continued development of the petrochemical
sector.
The
basis of Singapore’s
petrochemical sector, mentioned previously, is
the presence of a diversified
crude oil refining capacity.
It is easy to be sceptical about our chances of
developing a sustainable energy industry long into
the future. But in this 100th year of commercial
oil production it is perhaps also important for
us to take stock of where we have come from.
If
you talk to many of the original thinkers and
proponents of the Point Lisas Industrial
Estate —including
many of my predecessors as president of this chamber—they
will tell you that their concept for a world-class
heavy industrial estate was met with scepticism
bordering on derision by many people in the country.
Yet, look where we are today! We therefore feel
that there is sufficient basis for continued optimism
about this sector.
Story
from The Trinidad Guardian
The
Trinidad Guardian
Thursday
6th March, 2008
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