Over the past few weeks, we have highlighted the energy sector’s contribution to the economy of T&T. A vital area of this sector is the energy services subsector, which consists of the many local and foreign contractors that execute projects for the country’s major operators.
Over the last 10 years, this subsector has contributed an average of approximately $1.5 billion toward GDP each year. However, it should be noted that this contribution is trending downward. For instance, the sector contributed approximately $3 billion to GDP in 2015 but only $1.2 billion in 2024.
The energy services sector, officially labelled Petroleum Support Services by the Ministry of Finance’s Review of the Economy, comprises a large body of companies that provide a wide range of services to oil and gas operators in T&T.
These companies vary greatly in size, from large international corporations to small, family-owned SMEs. Most of them are members of the Energy Chamber of T&T.
The decline in GDP contribution is primarily due to the shrinking project base in T&T. Prior to 2015, there were many large-scale construction projects that required extensive contractor support. These were primarily greenfield projects—new development projects started from scratch without prior work or existing infrastructure. These large projects are significantly more valuable and require more support services than is typically available now.
Today’s work is largely focused on brownfield projects, which are development projects that involve the redevelopment, repurposing, expansion, or maintenance of an existing site, system, or infrastructure.
The fall-off of new, large-scale downstream projects has led to a shrinking energy services market, meaning more competition between companies. This competition, combined with shrinking margins due to price fluctuations, means the overall value of available projects is constrained, forcing more contractors to operate in a tough business environment.
The refinery was also a major hub for contractor activity, prior to its shutdown in 2018.
After the closure, many contractors lost a significant client. At the time the Energy Chamber ran a survey of its members and around 40 per cent of respondents reported that they were working for the refinery at the time of the closure and on average it accounted for about 25 per cent of their business. A few members reported at the time that the refinery accounted for 100 per cent of their business.
The overall contribution of the energy services sector must not be ignored, as a billion-dollar contribution to the nation’s GDP is not insignificant.
In terms of the contribution to the GDP, the services which are provided to the downstream petrochemical and gas processing sector contribute more than those provided to the upstream, since many of the inputs used for the offshore upstream sector are produced outside of the country.
One major activity in the upstream which creates significant value within the economy is the fabrication of platforms. Companies like TOFCO are able to generate value for the country through the provision of services relating to offshore infrastructure fabrication, which accounts for a significant proportion of an upstream development. This is why it is important to encourage platform fabrication in-country.
In addition to its economic value, the subsector employs many people across the country. These jobs are primarily located in South Trinidad and in fenceline communities that border upstream and downstream producers, such as Penal, Siparia, La Brea, Point Fortin, Couva, California, Mayaro, and Guayaguayare.
Many individuals working in this subsector have high levels of qualifications and diverse educational backgrounds.
Critically, the sector also employs many highly skilled trade workers—the unsung heroes of the energy sector—such as scaffolders, welders, and pipefitters, many of whom may have limited formal education but are the backbone of the country’s economy.
