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 Anns.
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 Mootilals 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
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.
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 countrys energy industries.
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&Ts energy
3. There must be independent monitoring and auditing of
local content targets and achievements by companies.
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.
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.
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 crudecan provide
important feedstock for the continued development of the
The basis of Singapores petrochemical sector, mentioned
previously, is the presence of a diversified crude oil refining
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
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 chamberthey
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.