Local banks understanding of the energy sector has been
described as immature. But the institutions have
finally woken up to the fact that they can no longer afford
not to invest in the energy sector.
Speaking at a seminar titled At the crossroads: Building
local content in T&Ts energy sector at the
University of the West Indies, assistant vice president of
RBTT Merchant Bank Ltd, Joel Pemberton said there was a general
lack of understanding by local institutional investors about
The seminar was organised by the Venture Capital Incentive
President of the South Chamber of Industry and Commerce, Dr
Jim Lee Young, said things are improving but banks are still
failing in their understanding of the sector.
He said access to capital is one problem often experienced
by indigenous service companies and independents.
and other financial institutions need to bring on board the
necessary oil and gas expertise to be able to assess these
opportunities correctly. This is not about lending money to
buy a house or a car, he said.
He said local independents usually looked to foreign stock
exchanges such as Toronto to raise equity because the investing
public in North America and London is far more sophisticated
and recognises the high returns that are possible with investments
in the upstream sector.
Pemberton explained that banks were now participating in the
energy sector but only projects below US$100-US$150 million
could be financed using local resources.
He added that the Insurance Act could be altered to allow
pension plans and the National Insurance Board to hold equity
positions in this sector, he said.