President of the Energy Chamber Dr Thackwray Driver has urged companies in T&T's energy sector to capitalise on the Guyanese market. He said there is a "huge" opportunity in the oil sector in Guyana especially with the ExxonMobil find, and therefore there would be a lot of activity happening in Guyana, and in Suriname, since there is exploration activity there as well.
Driver spoke to the Business Guardian on day three of last week's Energy Conference and explained the rationale behind dedicating a panel discussion on Guyana and Suriname.
Attending that panel discussion were: Jeff Simons, country manager, Esso Exploration and Production Guyana; Marny Daal-Vogelland, manager, petroleum contracts, Staatsolie in Suriname and Nigel Hughes, director, Guyana Oil and Gas Association.
During the panel discussion, Daal-Vogelland said Staatsolie was looking for partners to develop its Block B and Block C which are part of the nearshore fields in Suriname. "We are looking for partners to develop it further with Staatsolie."
Referring to doing business in T&T, she said, "We have always seen T&T as a hub with respect to surfaces (drilling) and most of the surface providers come out of T&T with respect to our own (Staatsolie) onshore operations. But with respect to equipment, everything comes out of Houston. It's cheaper and easier to access all the equipment you need for your operations."
Staatsolie supplies crude oil to Guyana for its bauxite industry and for electricity, she said.
Describing Guyana as a "good" neighbour, Daal-Vogelland said Guyana, Suriname and T&T are all small countries so the best alternative is for Staatsolie to work together with those countries because, "we don't have the critical mass to do things alone. By partnering we will all be better off. Trying to do everything yourself is not going to be very smart."
The key to partnering, she said, is that everyone must know what their stake is, and what their responsibilities are so "things would flow better."
Referring to tax regime in Suriname, Daal-Vogelland said, tax regimes are different in every country.
With the price of oil is hovering around US$55 a barrel on the global market, Daal-Vogelland said that is a "good" price for Staatsolie. "Our wells are very shallow so our costs are not the costs that you'd probably have in the deeper waters, that's a big plus."
Driver's comments on Guyana follow the huge oil find that global energy giant ExxonMobil confirmed in Guyana last year.
In mid-2016, ExxonMobil had announced that it discovered oil at its Liza-2 well with a predicted 800 million and 1.4 billion oil-equivalent barrels to be obtained.
The ExxonMobil find is so important the Energy Chamber took a delegation to that market in August 2016.
"There are a lot of business opportunities which have been developed coming out of that trade mission and we are doing a conference again with the Guyana Oil and Gas Association in March," Driver said.
Describing the 2017 Energy Conference as a success, Driver said compared to last year's conference, the number of booths sold at this year's conference was about the same.
"I think the number of booths went up slightly and the number of participants went up slightly. It shows there is confidence in the industry. We are in this difficult situation but there are opportunities for investments and for the service industries."
Delegates participating in the conference mainly came from US, Europe and Canada, Driver said.
He said the participation levels were good, adding that there were important conversations about the future of the gas industry.
The conversations, he said, really showed that, "we are in a crisis situation but the industry can get itself out of that by working together to fix the problems we (the players in the energy sector) have."
Another significant development at the conference was the signing of the Local Content Charter. He said even though T&T did well with having local content included in projects in the energy sector, there was need for deepening the presence of local content in T&T and to further develop T&T's service industry as well as ensure there is a competitive supply chain to service the operating companies in T&T.
Having a Local Content Charter would now see more collaboration in the local energy sector, he said.
On the issue of fiscal incentives and the supplemental petroleum tax (SPT), Driver said the Energy Chamber welcomed the government's acknowledgment of the need for fiscal reform. But, at the same time, he questioned how long the changes in the SPT would take to be implemented.
The changes, which are expected to be introduced with the natural gas master plan, need to be implemented with "urgency," he said.
With the announcement by bpTT president Norman Christie that BP is going to make US$1.3 billion in new investments in T&T, Driver said:
"Without those investments, our gas industry is going to be closing down. We need investments in order to maintain our gas industry. It's absolutely crucial for T&T."
The conversations really showed we are in a crisis situation but the industry can get itself out of that by working together to fix the problems we (the players in the energy sector) have.