The En­er­gy Ser­vices Sec­tor Sur­vey (ES­SS) maps the per­for­mance and op­ti­mism of our en­er­gy ser­vice sec­tor mem­bers, pro­vid­ing da­ta on their busi­ness con­fi­dence and on some of the phe­nom­e­na which im­pact on their op­er­a­tions and busi­ness prospects.

The en­er­gy ser­vices sec­tor is com­plex and has gen­er­al­ly been con­sid­ered to com­prise those firms which pro­vide di­rect ser­vices to the oil and gas ex­plo­ration and pro­duc­tion sec­tor and to the petro­chem­i­cal plants and oil re­fin­ery.

Lev­els of op­ti­mism in the en­er­gy ser­vices sec­tor have fall­en com­pared to the last three quar­ters. This could pos­si­bly be at­trib­uted to the lack of ac­tiv­i­ty in the down­stream plant con­struc­tion sec­tor. It may al­so re­flect the un­cer­tain glob­al and lo­cal over­all eco­nom­ic en­vi­ron­ment, which has been fur­ther com­pound­ed by un­cer­tain­ties brought about by the state of emer­gency and (See Fig­ure 1).

Im­pact of state of emer­gency

The En­er­gy Cham­ber car­ried out a sam­ple sur­vey from our mem­ber­ship-se­lect up­stream, down­stream and mid­stream op­er­a­tors as well as the en­er­gy ser­vices com­pa­nies-to as­cer­tain the in­flu­ence of the state of emer­gency on their busi­ness­es. The sur­vey high­light­ed how the state of emer­gency af­fect­ed in­di­vid­ual com­pa­nies' pro­duc­tion, the spe­cif­ic chal­lenges com­pa­nies face due to the state of emer­gency and the in-com­pa­ny so­lu­tions put in place to counter these chal­lenges.

Based on re­sults, 54 per cent of re­spon­dents not­ed that the state of emer­gency had af­fect­ed the pro­duc­tion or the vol­ume of their busi­ness while 46 per cent of re­spon­dents re­port­ed no change in the val­ue and vol­ume of their busi­ness. Most op­er­at­ing com­pa­nies in both the up­stream and petro­chem­i­cals sec­tor did not re­port that the state of emer­gency and cur­few had a ma­jor im­pact on their ac­tu­al pro­duc­tion.

How­ev­er, it led to de­lays in the im­ple­men­ta­tion of main­te­nance or con­struc­tion projects and drilling pro­grammes, po­ten­tial­ly lead­ing to con­strained pro­duc­tion in the fu­ture.These de­lays have had a more im­me­di­ate im­pact on ser­vice com­pa­nies and con­trac­tors who have had to slow down or post­pone the im­ple­men­ta­tion of ac­tiv­i­ties.The com­pa­nies af­fect­ed cit­ed main­te­nance de­lays, can­cel­la­tion of shifts, trans­porta­tion de­lays and prob­lems as­so­ci­at­ed with trav­el for em­ploy­ees liv­ing in des­ig­nat­ed cur­few ar­eas. Some com­pa­nies al­so cit­ed de­lays caused by in­ter­na­tion­al teams post­pon­ing trav­el to Trinidad.

Tra­di­tion­al­ly, the oil­field sec­tor has start­ed work ear­ly in the morn­ing and some of the work sites are long dis­tances from main pop­u­la­tion cen­tres on mi­nor roads. The ini­tial 5am cur­few meant that start times for morn­ing shifts were de­layed. Even out­side of the cur­few ar­eas, some mem­ber com­pa­nies re­port­ed that po­lice road blocks have dis­cour­aged work­ers from trav­el­ling to work sites dur­ing cur­few hours.

Lev­els of Op­ti­mism (Fig­ure 1)

As the sur­vey shows, de­spite the in­crease in ex­plo­ration ac­tiv­i­ty, the en­er­gy ser­vices sec­tor is still ex­pe­ri­enc­ing a pe­ri­od of un­cer­tain­ty in the val­ue and vol­ume of busi­ness (See Fig­ures 2 and 3).

Most re­spon­dents are al­so in­di­cat­ing that they do not ex­pect any change in the lev­els for both val­ue and vol­ume of busi­ness in Q4 2012.

Em­ploy­ment

Em­ploy­ment in the en­er­gy ser­vices sec­tor ap­pears to be stag­nant. Forty-sev­en per cent of re­spon­dents said that there would be no change in num­bers em­ployed, with on­ly 29 per cent of the re­spon­dents in­di­cat­ed that their em­ploy­ment lev­els were up.

These stag­nant em­ploy­ment sta­tis­tics point to no new de­vel­op­ments, es­pe­cial­ly with re­spect to down­stream plant con­struc­tion (the ma­jor cre­ator of em­ploy­ment in the sec­tor).

While rig ac­tiv­i­ty has in­creased in 2011, with five rigs op­er­at­ing off­shore, com­pa­nies would have been aware of this im­prove­ment from ear­li­er in the year and would like­ly have added to their staff by mid-June.

There is al­so no new an­tic­i­pat­ed down­stream project planned for 2011 and any new con­struc­tion will not like­ly start un­til mid-2012.

Cap­i­tal ex­pen­di­ture

Re­sults al­so show that cap­i­tal ex­pen­di­ture is on the in­crease. Last quar­ter, on­ly 25 per cent of re­spon­dents in­di­cate that they would be in­creas­ing cap­i­tal ex­pen­di­ture on land and build­ing and in­for­ma­tion tech­nol­o­gy. This quar­ter, most re­spon­dents said they would be in­creas­ing cap­i­tal ex­pen­di­ture in land and build­ing (47 per cent), in­for­ma­tion tech­nol­o­gy (47 per cent), plant, ma­chin­ery and ve­hi­cles (41 per cent).

Due to the un­cer­tain­ty in de­mand in T&T, it is im­por­tant for lo­cal en­er­gy ser­vices com­pa­nies to seek in­ter­na­tion­al mar­kets for their goods and ser­vices.

Re­cent­ly, the En­er­gy Cham­ber or­gan­ised a very fruit­ful en­er­gy ser­vices trade mis­sion to Suri­name. The cham­ber has tak­en trade mis­sions to Cu­ba, Ugan­da, Tan­za­nia, Kenya, Rwan­da, Ghana, Nige­ria and Brazil.

Cur­rent­ly, the En­er­gy Cham­ber is plan­ning a re­turn vis­it to Brazil.

For fur­ther in­for­ma­tion, please con­tact: Priya Mara­jh at: priya@en­er­gy.tt

EN­ER­GY CHAM­BER