T&T Not Running Out Of Oil, Gas

The challenges facing the energy sector have little to do with whether this country is running out of oil and gas but rather ensuring there are the right measures to make it prosper. That’s the view of the founder and chief executive officer of DeNovo Energy, Joel “Monty” Pemberton, who in the first of a six-week series on CNC3 , titled The Future of Energy, said that T&T has been blessed with abundant natural resources.

He said: “Trinidad and Tobago sit in a prolific hydrocarbon basin, next to Venezuela, so you always have the argument of do we have enough or not, but it is proven over the last 100 years that we have significant oil and gas reserves.” Pemberton noted: “In order to really exploit that or monetise that, you need activity and in order to have activity, you need to have a significant amount of capital.”

CEO of the Energy Chamber Dr Dax Driver said there are challenges with the country’s taxation regime, especially with the Supplemental Petroleum Tax (SPT) which has hurt smaller operators and is a dis-incentive to higher production. He said: “You get more tax value from a barrel of oil than you do of the barrel of oil equivalent of natural gas. If I was looking at where I’m going to get revenue from if I was the Minister of Finance…Increasing oil production is a place I’d be putting a lot of emphasis”

Economist and political leader David Abdulah noted that while gas production has increased, the people of T&T have not benefited from the tax revenue generated. Abdulah said: “If you take the gas sector, and you have an uptake in gas production, over the last few years, the actual returns to T&T have been minimal compared to the returns to the investors.”

He continued: “Primarily the majors, the big multinationals because of tax concessions that were provided to them to create, so called, the right investment environment in order for them to invest… but because of that, the cost of their investments, which have been substantial, has been written off against their revenues very rapidly and therefore in terms of tax take that goes to the government the tax take has been minimal.”

One of the solutions posed by Pemberton is more collaboration and dialogue between the state, international capital and players and local management.