When Min­is­ter of Fi­nance Win­ston Dook­er­an presents the 2011/2012 bud­get next Mon­day, he will be faced with the chal­lenge of de­clin­ing rev­enues from the en­er­gy sec­tor. Dook­er­an will have to deal with the re­al prospect of low­er glob­al en­er­gy prices and a sig­nif­i­cant fall in crude pro­duc­tion due to the re­duc­tion in pro­duc­tion from bpTT. En­er­gy Min­is­ter Kevin Ram­nar­ine ad­mits that the great­est chal­lenge he will face dur­ing the next fis­cal year in in­creas­ing crude pro­duc­tion. Ram­nar­ine said cen­tral to the ef­fort to in­crease crude pro­duc­tion would be Trin­mar.

Last week, the Busi­ness Guardian re­port­ed ex­clu­sive­ly that crude pro­duc­tion out of bpTT had fall­en by a stag­ger­ing 40 per cent over the last six months and has cost the Gov­ern­ment mil­lions in lost rev­enue.

The min­is­ter has con­stant­ly said that his num­ber one pri­or­i­ty is the in­creased pro­duc­tion of oil, adding that 10,000 bar­rel in­crease could lead to an­oth­er $1.2 bil­lion to the cof­fers of the Min­istry of Fi­nance.

En­er­gy con­sul­tant An­tho­ny Paul agrees. He said one of the quick­est ways to in­crease do­mes­tic pro­duc­tion is to go af­ter the small de­posits al­ready iden­ti­fied by hav­ing a drilling pro­gramme on­land and re­mov­ing all the ob­sta­cles to those wells be­ing drilled.

Paul said: "A big part of the prob­lem is the length of time it takes to get things done. The ad­min­is­tra­tive ob­sta­cles in the Min­istry of En­er­gy, Petrotrin and Min­istry of Fi­nance are all slow­ing down the work that can be done by pri­vate cap­i­tal, in­clud­ing lease and far­mouts." Paul said to get ad­di­tion­al ac­tiv­i­ty the gov­ern­ment will have to look at short, medi­um and long-term mea­sures. He sug­gest­ed that the fis­cal mea­sures can be tweaked to make some of the small­er finds com­mer­cial, but there needs to al­so be greater at­ten­tion played to the con­tract man­age­ment side of the busi­ness. "Un­der the con­tracts, the com­pa­nies are told that they have to do their en­deav­our best in the ex­plo­ration and de­vel­op­ment of their acreage. There are com­pa­nies with small­er fields that are al­ready iden­ti­fied, but are not on their radar.

"What the Gov­ern­ment can do is to en­cour­age them to de­vel­op the small­er finds or re­lin­quish the bock. In ad­di­tion, there are some ar­eas in which the lack of prop­er in­fra­struc­ture, par­tic­u­lar­ly in Trin­mar, which is neg­a­tive­ly im­pact­ing pro­duc­tion, and the Gov­ern­ment needs to act up­on that."

He ar­gued that the Gov­ern­ment need­ed to go "af­ter the right com­pa­nies tar­get­ing them by hav­ing suf­fi­cient da­ta and the right mar­ket­ing sto­ry." It is al­so ex­pect­ed that crude prices will de­cline as a re­sult of the weak­en­ing glob­al econ­o­my. The glob­al eco­nom­ic out­look con­tin­ues to be bleak, with growth pro­jec­tions for all the ma­jor ad­vanced economies weak­er than pre­vi­ous­ly fore­cast by lead­ing rat­ing agen­cies and in­sti­tu­tions. On­ly on Mon­day, rat­ing agency, Fitch, re­port­ed that growth rates in the more ad­vanced economies had stalled to rates not seen since 2009 when there was a deep re­ces­sion in the ad­vanced economies. In the Eu­ro­zone, for ex­am­ple, fore­casts now in­cor­po­rate near-ze­ro quar­ter­ly growth un­til first quar­ter next year. This is, in part, a re­flec­tion of the im­pact of the on­go­ing sov­er­eign debt cri­sis as sen­ti­ment across Eu­rope has weak­ened and un­cer­tain­ty has in­creased marked­ly, which is like­ly to lead to a re­duc­tion in de­mand for crude oil and put down­ward pres­sure on en­er­gy prices.

EN­ER­GY RE­PORTER