Government is moving to restructure the fiscal regime for oil and gas production, taking into consideration a review by the International Monetary Fund (IMF), acting Energy Minister Colm Imbert said yesterday.
Imbert, who filled in for the ailing Franklin Khan at the T&T Energy Conference and Trade Show, which opened at the Hyatt Regency in Port-of-Spain, said it was necessary to produce a win-win situation for all to motivate energy companies to explore and increase production so that Government could optimise its revenue from the sector.
"As part of the overall strategy to increase hydrocarbon production, the ministry in 2017 will make available for exploration, acreage on land, and in marine areas, including our deep-water province. Such areas may include acreage that has been relinquished or that has reverted to the State by virtue of the expiration of contractual deadlines.
"The ministry is currently assessing prospects and in short order will be requesting nominations from upstream companies as part of the process in the selection of blocks for the bid round.
"The initiatives to stimulate the domestic energy sector will also include the review of the fiscal regime for hydrocarbon production taking into consideration the review undertaken by the International Monetary Fund and stakeholder feedback," he said.
Imbert said the country suffered a 90 per cent decline in revenue from petroleum, from $19 billion in 2014 to less than $2 billion last year, because of the drop in oil prices. He identified reform of the Supplementary Petroleum Tax, equitable use and distribution of natural gas among downstream companies and agreement with the upstream producers on new long term gas supply contracts as issues that must be confronted.
"There is significant disparity in value accruing to Government as compared to that received by energy companies and their associates from the monetization of this country's hydrocarbon resources. It is therefore necessary to realign the interests of the companies and the Government to ensure equitable outcomes for all parties and ultimately the people of Trinidad and Tobago," he said.
Imbert said state-owned Petrotrin, which accounts for almost 50 per cent of the country's total oil production, is "the key to improved oil production in T&T for the short term and long term."
He added: "It is our best chance to reverse the current decline and the Government will therefore be examining and implementing a wide range of strategies in 2017, including joint ventures, to boost and enhance Petrotrin's oil production, both on land and in the marine area, as outlined by the Prime Minister in his address to the nation."
In the upstream sector, the number of wells projected for 2017 has dropped from 69 last year, to 56 development wells in 2017.
The minister said: "We need to reverse this trend since in respect of crude oil and condensate, production is expected to improve only marginally from the current production of approximately 71,000 barrels of oil per day."
He said the Gas Master Plan report will be submitted to Parliament's Energy Affairs Committee after it is reviewed by the Energy sub-committee of Cabinet. The Energy Task Force, headed by former finance minister Wendell Mottley, has been meeting with stakeholders in the sector about the plan, Imbert said.
"In the coming weeks, these consultations will intensify and we are optimistic that the parties will arrive at an accommodation on gas supply and pricing arrangements for the medium term."
Imbert said gas production is expected to increase this year when the Trinidad Regional Onshore Compression Project (TROC) and Juniper come on stream. Beyond 2018,the projects to come on stream–Angelin, Savannah, South East Queen Beach and Offshore Compression–are expected to provide stability to domestic gas production, supplemented by gas from Venezuelan by 2019.
In other industry developments, Imbert said seven exploration wells will be drilled this year, including in bpTT's Columbus Basin acreage, while BHP Billiton will continue its deep water exploration programme with two more wells scheduled for the third and fourth quarters of 2017.
In addition, T&T will continue to deepen its global footprint, he said,
"Through NGC we are participating in the infrastructural development, processing and marketing of significant proven natural gas provinces, which are located outside the jurisdiction of T&T. The major across the border prospect is the Dragon Field," he said.