Conrad Enill: T&T's fiscal outlook under review From a position of strength
PORT SPAIN
Trinidad & Tobago Express
Petroleumworldtt.com
12 31 08
Trinidad & Tobago is expected to remain one of the strongest sovereign economies in the Latin American region, Minister of Energy and Energy Industries Conrad Enill said last week during the Caribbean Energy Conference at Hyatt Regency, Port of Spain.
Quoting from the Business Monitor International. Trinidad & Tobago Oil and Gas Report Q4 2008, Enill said this was largely attributed to the fiscal and foreign reserves built up in recent years, as well as the trimming down of public external debt liabilities to around 6-7 per cent of GDP.
"Despite a projected rise in public external debt in 2008 and 2009 - as the Government looks to boost spending in infrastructure, the island's net creditor status will not come under any serious pressure."
He said while countries across the emerging markets have deteriorated markedly as a result of growing external asymmetries, structural economic weaknesses and global risk aversion, "Trinidad & Tobago is projected to remain one of the strongest sovereign economies in the region."
"The country's fiscal outlook is undergoing review due to the sharp decline in global energy prices..., but the Government's net creditor position at US$7.4bn, international reserves far exceeds the US$1.4bn public external debt load remains well intact."
"At a projected 3.4 per cent and 2.9 per cent in 2008 and 2009 respectively, economic growth is reduced and the country is relatively well placed, especially compared to the bulk of its Caribbean peers, to contend with the growing global economic and financial headwinds."
Government, he said plans to facilitate natural gas based industries to create greater value downstream and emphasis is therefore being placed on those downstream investments which generate spin-off industries, provide opportunities for significant permanent employment, create greater linkages with the domestic economy and widen the country's tax revenue base.
"The policy on the use of the country's natural gas is guided by the criteria of the provision of infrastructure, the development of a skilled labour force, the development of a range of petrochemical and other gas-based industries, the support of direct strategic investments, through the State-owned National Gas Company and other agencies, and the encouraging of local and foreign investment by the active marketing of Trinidad and Tobago as a preferred location to do business."
Enill said the implementation of its plans to achieve these goals, the Government has initiated the promotion of exploration and development activities in existing fields, opening up new acreage for exploration with a view to increasing the reserve base, the establishment of a second natural gas based industrial estate, the further development of gas transmission systems and the application of appropriate incentives to stimulate investment.
"The upstream energy sector continues to be driven by policies that are intended to achieve the expansion of activities for exploration and production of hydrocarbon resources."
"It is the Government's intention to offer shallow marine acreage for competitive bidding by early 2009."
He said five blocks located on the East Coast and the North Coast of Trinidad and Tobago are to be offered for this bid round. "Our evaluation indicates that the blocks are likely to be gas prone and offers great potential for enhancing our gas reserves. This exploration thrust will be sustained in 2009 with the offer of blocks in the Trinidad and Tobago Deep Atlantic Area."
"The southerly part of this acreage was offered in 2006 and attracted one bid from Statoil.
"Since then we have re-evaluated the area and will be acquiring new data, which will form the basis for the determination of location of the blocks. The mix will include the more northerly blocks in the Trinidad and Tobago Deep Atlantic Area, east of blocks 23b and 24."
The Energy Minister said available data, exploration activities have only covered one third of the country's potential hydrocarbon resources and new initiatives will target resources that are located primarily in the Deep Atlantic- the new frontier.
"The Government of Trinidad and Tobago's policy on the natural gas industry is to continue to diversify the sector so that a broad range of commercial activities are developed."
"We are also promoting the establishment of downstream industries that maximize the multiplier effects and value added through the creation of linkages between the energy sector and the rest of the economy."
He said a policy decision has been taken so that proposals for new projects must move beyond primary outputs to include value added products that can be either exported for higher value or used in local processes.
This applies evenly for projects that produce first stage products such as ammonia and methanol as well as for completely new products, such as aluminium.
"In this regard, the Government has undertaken to develop an industrial estate at La Brea, and has selected Point Lisas South and East, Cap De-Ville and Oropouche Bank for further studies to confirm their suitability as industrial sites."
There are also proposals to develop industrial port facilities at Brighton, Galeota, and Chatham.
In recognizing the growth of the electricity needs in Trinidad and Tobago, the Government has developed generation and transmission projects that are required to meet national electricity needs, he said.
"A strategy has also been developed for capacity additions to continue to meet the country's power requirements to 2016 and beyond."
The strategy, he added is centered on conversion from gas turbine and steam plants to combined cycle generating units, which would result in a decrease in natural gas consumption and generate revenue savings. This is to be achieved by converting some of the less efficient gas turbine and steam plants to combined cycle and ensuring that new generation additions are combined cycle technology.
"The Government is presently reviewing proposals for the establishment of a new refinery in Trinidad and Tobago."
"This project will revitalise and revolutionize the refining business in the country and lead to the introduction of new technology, creation of new jobs and increases in Government revenue through taxes on the earnings of the plant."
Story by Camille Bethel from Trinidad & Tobago Express
Trinidad & Tobago Express
Wednesday, December 17th 2008
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