EN­ER­GY RE­PORTER

The Cen­tral Bank's pro­jec­tion of 0.5 per cent growth in the en­er­gy sec­tor in the third quar­ter of 2012 is based on its es­ti­mate that there was an ex­pan­sion in nat­ur­al gas out­put.

In a tele­phone in­ter­view on Tues­day, head of the bank's re­search de­part­ment, Dr Alvin Hi­laire told the Busi­ness Guardian that while there were de­clines in many of the en­er­gy sub-sec­tors, the in­crease in nat­ur­al gas pro­duc­tion was enough to reg­is­ter 0.5 per cent growth in the en­er­gy sec­tor in the third quar­ter 2012 when com­pared to the same pe­ri­od 2011.

Hi­laire said: "We will in a month's time put out our re­port on the per­for­mance of the econ­o­my but when we looked at the fig­ures we were able to de­ter­mine that notwith­stand­ing the fall in oil pro­duc­tion and in some of the com­modi­ties, nat­ur­al gas pro­duc­tion in­creased suf­fi­cient­ly to lift them all up and this de­ter­mi­na­tion is in part made based on the con­tri­bu­tion of nat­ur­al gas to the over­all pro­duc­tion from the en­er­gy sec­tor."

The Cen­tral Bank's chief econ­o­mist said the fig­ures were based on re­al GDP growth and not nom­i­nal growth and there­fore the growth was based on in­creased out­put and the price of the com­modi­ties were not fac­tored in. In ad­di­tion, he said the growth was year-on-year in­creas­es and not quar­ter-by-quar­ter growth.

The lat­est in­dus­try in­for­ma­tion from the Min­istry of En­er­gy con­firms Dr Hi­laire's state­ment with sig­nif­i­cant im­prove­ments in nat­ur­al gas pro­duc­tion in Ju­ly and Au­gust 2012, but with de­clines in Sep­tem­ber and Oc­to­ber.

Ac­cord­ing to the Min­istry's fig­ures, for the month of Ju­ly dai­ly nat­ur­al gas pro­duc­tion was 4,468 mil­lion cu­bic feet per day (mm­cf/d) when com­pared to 4,110 mm­cf/d in 2011.

In Au­gust 2012, the dai­ly nat­ur­al gas pro­duc­tion was 4,382 mm­cf/d which was high­er than in 2011 when the dai­ly pro­duc­tion for Au­gust was 3.842 mm­cf/d.

There was how­ev­er a de­cline in nat­ur­al gas pro­duc­tion in Sep­tem­ber 2012 when com­pared to the same month in 2011 with pro­duc­tion falling to a mere 3,693 mm­cf/d in Sep­tem­ber when com­pared to same pe­ri­od 2011 when it was 4.211 mm­cf/d.

How­ev­er there were de­clines in all the oth­er en­er­gy sub sec­tors with the biggest fall be­ing in crude oil pro­duc­tion.

For the third quar­ter 2011 crude oil pro­duc­tion av­er­aged 90,799 bar­rels of oil per day (bo/d) with the high­est dai­ly pro­duc­tion av­er­ag­ing in Sep­tem­ber 2011 at 92,790 bo/d.

This is sig­nif­i­cant­ly high­er than for the cor­re­spond­ing pe­ri­od last year when it plum­met­ed by al­most 11 per cent down to an av­er­age of a mere 81,003 bo/d and the low­est fig­ure in more than half a cen­tu­ry.

The in­crease in nat­ur­al gas pro­duc­tion did not as­sist many of the oth­er com­modi­ties, ex­cept LNG which al­so ex­pand­ed in the third quar­ter of 2012. In the third quar­ter of 2012 am­mo­nia and methanol pro­duc­tion fell year on year.

"There ap­pears to be a lag be­tween an in­crease in nat­ur­al gas pro­duc­tion and com­mod­i­ty pro­duc­tion and so we see this lag in the num­bers," Hi­laire added.

There were in­creas­es in ex­plo­ration ac­tiv­i­ty but a sur­vey by the En­er­gy Cham­ber showed that ser­vice com­pa­nies in 2012 did not see more busi­ness.

Ac­cord­ing to the cham­ber, most re­spon­dents in­di­cat­ed that their val­ue and vol­ume of busi­ness was down the past three months. Ad­di­tion­al­ly most of the sur­vey re­spon­dents do not ex­pect an in­crease in the val­ue or vol­ume of busi­ness in the next quar­ter.

The cham­ber sur­vey read: "This is sur­pris­ing as the num­ber of rigs op­er­at­ing in T&T re­mained con­sis­tent­ly high com­pared to the same pe­ri­od last year.

"How­ev­er, while the up­stream sec­tor is wit­ness­ing con­sis­tent buoy­an­cy there has been no new an­nounce­ments on when shov­el-ready down­stream projects, such as AUM II and Carisal's cal­ci­um chlo­ride plant, will be­gin con­struc­tion.

"The on-go­ing gas sup­ply cur­tail­ment to petro­chem­i­cal plants in the Point Lisas In­dus­tri­al Es­tate is al­so prov­ing to be a con­cern, es­pe­cial­ly with methanol and am­mo­nia prices at their high­est since 2008."

Hi­laire said the Bank re­mains con­fi­dent that the econ­o­my will grow at 1.0 per cent, down for the ear­li­er fore­cast of 1.5 per cent and that the en­er­gy and non-en­er­gy sec­tors will con­tribute.

In its De­cem­ber 2012 Fi­nan­cial Sta­bil­i­ty Re­port (FSR) , the Cen­tral Bank said: "On the do­mes­tic front, eco­nom­ic growth re­mained sub­dued as re­al gross do­mes­tic prod­uct (GDP) con­tract­ed for the first half of the year.

"Much of the de­cline can be at­trib­uted to the com­bi­na­tion of pro­longed main­te­nance work and se­cu­ri­ty up­grades in the en­er­gy sec­tor as well as falling crude oil and nat­ur­al gas pro­duc­tion. In the non-en­er­gy sec­tor, out­put was af­fect­ed by in­dus­tri­al ac­tion at Trinidad Ce­ment Ltd (TCL) which, in turn, neg­a­tive­ly im­pact­ed the con­struc­tion and man­u­fac­tur­ing sec­tors."

And in his state­ment at the launch of the FSR, Cen­tral Bank Gov­er­nor Jwala Ram­bar­ran sound­ed a note of cau­tion, say­ing: "While there is an im­me­di­ate fo­cus on rekin­dling eco­nom­ic growth in T&T, the Cen­tral Bank is mind­ful of the threats that a tur­bu­lent glob­al set­ting, slug­gish do­mes­tic econ­o­my and per­sis­tent­ly low do­mes­tic in­ter­est rates pose to the per­for­mance and prof­itabil­i­ty of lo­cal fi­nan­cial in­sti­tu­tions."