New
energy tax regime
Minister
of Energy, Conrad Enill
Port Spain
Petroleumworld.com, Mar 09, 2008
Government’s
around the corner new energy tax regime which
Minister of Energy, Conrad Enill,
has declared must be tailored to meet the needs
of the marginal fields, the deep water and heavy
oil blocs, clearly will take into account the high
cost of winning oil and natural gas in areas in
and around Trinidad and Tobago today. The thrust
of the new tax regime, as hinted by Minister Enill,
should act as an incentive to energy companies
operating here to continue and even expand drilling
for crude and natural gas at a period when known
oil reserves, in particular, have been listed to
last a little more than a decade.
In
addition, the new energy tax measures, once they
are as attractive as the Energy Minister’s
statement suggests, should serve to attract other
multinationals to join in the exploration for fossil
fuels by substantially reducing the final cost
after taxes, of exploration. This, particularly,
as drilling for oil and natural gas in deep water
areas around Trinidad can not only be costly but
carries with it the possibility of dry holes at
the end of the exercise.
Even
with today’s high energy prices on
the international market and, for example, with
crude oil prices hovering around US$100 a barrel
nonetheless, the prospect of turning up nothing
after expending hundreds of millions of dollars
on exploration can be daunting. The revelation
by the Energy Minister that the People’s
National Movement Administration will be having
a new energy tax regime in place, as early as the
start of the second quarter, emphasises the importance
to Government, and by extension the citizens, of
the continuing contribution to the Trinidad and
Tobago economy of crude and natural gas.
Minister
Enill, who was addressing the 2008 Petroleum
Conference of the South Trinidad Chamber of Industry
and Commerce last Monday at the Hilton Trinidad,
when he announced that the new energy tax regime
would shortly be in place, advised the Conference
that Government had hired an independent consultant
to examine the energy taxes. The consultations,
the Energy Minister stated, were now in the second
week and the authorities were “moving very
aggressively to get these matters dealt with so
we could have a regime in place by the beginning
of next quarter”.
He pointed out that with the crude oil and natural
gas audits to be completed this country still possessed
substantial heavy oil reserves which remained unexplored.
Estimates had placed the volume of crude oil still
to be produced in the on shore area at approximately
100 million barrels, while estimated heavy oil
in the offshore areas ranged from some 2,600 million
to 5,000 million barrels. Meanwhile, inasmuch as
the Petroleum Act had been originally designed
to deal with crude oil operations in the main,
the Administration is expected to hire a consultant
to develop a natural gas governance framework.
Given the long accepted importance and contribution
of the natural gas industry to the Trinidad and
Tobago economy we are forced to wonder aloud why
a governance framework for natural gas had not
been created much earlier.
Meanwhile, there are Trinbagonians with tunnel
vision, who will argue that since the price of
crude as well as that of natural gas is high then
there should be no need for Government to introduce
a new energy tax regime. As we pointed out earlier,
however, both the costs and risks of energy exploration
are high. In turn, there are several energy producing
countries in competition with Trinidad and Tobago.
What is on our side, however, is social stability
as well as relative closeness to the all important
United States market.
Story
from Trinidad & Tobago Newsday
Trinidad & Tobago
Newsday
Monday, March 3 2008
Copyright© 2008
respective author or news agency. All rights
reserved.
We welcome the use of Petroleumworld™ stories
by anyone provided it mentions Petroleumworld.com
as the source. Other stories you have to get
authorization
by its authors.
