One of the important areas of energy diplomacy that the country needs to ensure remains on the front burner is the talks between T&T and Venezuela about the monetising of the fields, containing oil and gas, that straddle the maritime border of the two countries.
In the Senate on March 27, Senator Terrence Deyalsingh asked Energy Minister Kevin Ramnarine to state government’s policy position on the cross-border gas field between Trinidad and Tobago and Venezuela and to indicate the progress that had been made on the negotiations for monetizing the resources of the Loran Manatee gas field since this Government came into office.
In answer to the first question, Ramnarine said: “Government has adopted an aggressive exploration programme to replace the depleted gas reserves and to achieve and maintain a reserves profile that meets the growing needs of Trinidad and Tobago and to meet the baseload demand. In this context, it is Government’s strategy to engage all stakeholders in the pursuit of reaching agreements on the monetization of cross-border fields with Venezuela. And, there are three such fields that we are aware of, one of them being the Loran/Manatee gas field which is the largest of the three.”
In answer to the second question, on the progress of the talks, the Energy Minister referred to a meeting in August 2010 at which there was an exchange of instruments of ratification of the Framework Treaty on the Unitization of Hydrocarbon Reservoirs that extend across the delimitation line between Trinidad and Tobago and Venezuela and the signing of the Agreement Unitization of the Exploitation and Development of Hydrocarbon Reservoirs specifically Loran/Manatee.
Ramnarine said that in January of 2011, the Joint Steering Committee and the Special Multi- Disciplinary Committee comprising representatives of the two governments met in Caracas to determine the governance structure for the development of Loran/Manatee.
Following that meeting, a proposed governance structure involving the establishment of a Unit Directing Committee comprising all stakeholders was developed and is to be reviewed by both parties at the upcoming technical meeting.
When the Unit Directing Committee Agreement is finalised, there would be the selection of the Unit Operator who would prepare the development plan for the Loran Manatee field for consideration of the Unit Directing Committee. And the minister added that it was projected that production from the Loran/Manatee field could commence sometime in the period 2017—2020.
The minister said that he met with his Venezuelan counterpart in December last year at which it was agreed “that the two governments should hold more frequent meetings in order to concretise and implement the development of the Loran/Manatee as well as the other cross-border fields.”
A meeting of the Joint Steering Committee and Special Multi-Disciplinary Committee was scheduled for April 2012.
I may be entirely wrong, but I did not get the sense from reading the minister’s response to the questions in Hansard that this is a matter that is being treated with the importance that it deserves.
Given the fact that British Gas and Chevron, two companies operating in both Venezuela and T&T, are the companies at the centre of the cross-border talks, one wonders whether it is not possible to fastback the discussions such that the projection for the start of production from the Loran/Manatee field is brought forward from 2017 at earliest.
This is the kind of intervention—alone with energy diplomacy with regard to T&T’s relationship with China, Japan and South Korea—that would be welcomed, along with some clarity what the Government proposes to do with Methanol Holdings (Trinidad) Ltd and its Oman-based subsidiary.
It is hoped that the minister addresses these matters in his contribution to the budget debate in the Senate.
If the importance of energy diplomacy is not grasped at the highest level—and one refers here to the Prime Minister—then the prospects of T&T continuing to enjoy the standard of living that it has become accustomed to appear bleak.
IMF downgrades T&T’s growth prospects
The International Monetary Fund (IMF) is predicting that the T&T economy will continue to be in the doldrums for the rest of 2012, with the multilateral financial institution predicting that the country’s economy will only grow by 0.7 per cent.
The prediction of marginal growth for T&T is from the World Economic Outlook—published this week to coincide with the meetings of the IMF and the World Bank, its sister Washington DC-based institution—held in Japan.
The IMF also stated that the T&T economy declined by 1.5 per cent in 2011 and experienced no growth in 2010.
The IMF’s call on T&T’s growth rate in 2012 is at odds with the prediction made by Finance Minister Larry Howai in the 2013 budget in which he estimated that the T&T’ economy would grow by 1.2 per cent this year.
Howai’s prediction that the local economy would generate $50.74 billion in revenue for the 2013 fiscal year is linked to the assumption of the local economy growing by 1.2 per cent—and also that the country would earn revenues based on an average oil price of US$80 a barrel and an average natural gas price of US$2.75 per million cubic feet.
The prediction of $50.74 billion in revenue for the period October 1, 2012 to September 30, 2013 is 6.4 per cent higher than the $47.67 billion that the budget document Review of the Economy 2012 estimates that T&T earned in the 2012 fiscal year.
While being downbeat on the prospects of the T&T economy in the 2012 calendar year, the IMF is predicting growth of 2.2 per cent next year and 3 per cent by 2017. Presenting the 2013 budget, Howai said: “We have put the economy on a self-sustaining growth path over the medium term. We project an annual average growth rate of 2.5 per cent.”
The projection of growth by the Minister of Finance for the fiscal period 2013 to 2016 is also important because the ability of T&T to achieve a balanced budget by 2016, a stated goal of the minister, depends on the accuracy of his growth predictions.