High­er prices can ease a Bud­get. They can­not re­place de­plet­ed re­sources, ac­cu­mu­lat­ed ex­pe­ri­ence or the need to turn both in­to last­ing na­tion­al val­ue.

Price can res­cue a Bud­get. It can­not re­plen­ish a pe­tro­le­um province.

When en­er­gy prices rise, Trinidad and To­ba­go gets wel­come breath­ing room: more ex­port earn­ings, more for­eign ex­change and po­ten­tial­ly more rev­enue for the State. But tem­po­rary re­lief can eas­i­ly be mis­tak­en for struc­tur­al re­cov­ery. A bet­ter price for a de­clin­ing vol­ume does not re­place the re­source be­ing de­plet­ed, and a wind­fall spent to­day does not au­to­mat­i­cal­ly strength­en the econ­o­my that must sup­port us to­mor­row.

That rais­es a wider ques­tion about pe­tro­le­um wealth. Mon­ey is not the on­ly pe­tro­le­um as­set that can be con­sumed. Ex­pe­ri­ence can be wast­ed too.

Two pe­tro­le­um as­sets we can squan­der

1. Tem­po­rary pe­tro­le­um wind­falls - ad­di­tion­al rev­enue cre­at­ed by favourable prices can dis­ap­pear in­to re­cur­rent ex­pen­di­ture with­out leav­ing a last­ing as­set.

2. Ac­cu­mu­lat­ed pe­tro­le­um ex­pe­ri­ence - decades of tech­ni­cal, com­mer­cial, in­sti­tu­tion­al and in­dus­tri­al learn­ing can be lost, ig­nored or left un­used in­stead of im­prov­ing de­ci­sions at home and earn­ing in­come abroad.

What should we do with a wind­fall?

Cur­rent in­ter­na­tion­al en­er­gy prices add an­oth­er di­men­sion. High­er prices can pro­vide wel­come ad­di­tion­al pe­tro­le­um rev­enue and for­eign ex­change. The IMF has cau­tioned, how­ev­er, that im­proved en­er­gy prices can strength­en the fis­cal and ex­ter­nal po­si­tion in the near term with­out re­solv­ing the struc­tur­al pres­sures as­so­ci­at­ed with de­clin­ing pro­duc­tion and weak­er en­er­gy rev­enues.[1]

That cre­ates both an op­por­tu­ni­ty and a temp­ta­tion. The temp­ta­tion is to al­low un­ex­pect­ed pe­tro­le­um rev­enue to dis­ap­pear in­to re­cur­rent ex­pen­di­ture. The op­por­tu­ni­ty is to con­vert at least some of it in­to some­thing that lasts be­yond the price cy­cle.

T&T al­ready has the Her­itage and Sta­bil­i­sa­tion Fund, so this is not nec­es­sar­i­ly an ar­gu­ment for an­oth­er fund. It is an ar­gu­ment about what we want tem­po­rary wind­falls to ac­com­plish. The fi­nan­cial and de­mo­graph­ic pres­sures fac­ing the Na­tion­al In­sur­ance Sys­tem, and the re­sult­ing de­bate over con­tri­bu­tions and re­tire­ment age, re­mind us that to­day's de­ci­sions even­tu­al­ly land on to­mor­row's cit­i­zens.

Nor­way can­not sim­ply be copied, but the prin­ci­ple be­hind its ap­proach is in­struc­tive. State pe­tro­le­um cash flows are in­vest­ed through its Gov­ern­ment Pen­sion Fund frame­work, with a fis­cal rule gov­ern­ing how that wealth is brought grad­u­al­ly in­to the econ­o­my.[2] Its ap­proach recog­nis­es that con­vert­ing a fi­nite pe­tro­le­um re­source in­to cash should not mean that the wealth dis­ap­pears with the gen­er­a­tion that ex­tract­ed it.

We should there­fore be will­ing to ask whether some por­tion of gen­uine­ly ex­cep­tion­al pe­tro­le­um rev­enues could be de­lib­er­ate­ly di­rect­ed to­wards longer-term na­tion­al fi­nan­cial se­cu­ri­ty, in­clud­ing strength­en­ing the sus­tain­abil­i­ty of the NIS, rather than au­to­mat­i­cal­ly be­com­ing part of to­day's ex­pen­di­ture.

Learn­ing from our­selves

There is an in­ter­est­ing irony in all of this.

Over the past year I have been writ­ing sep­a­rate se­ries in Guyana and Namib­ia about nat­ur­al gas and the choic­es coun­tries should make as they seek to con­vert pe­tro­le­um re­sources in­to last­ing na­tion­al val­ue. The cir­cum­stances of the two coun­tries are very dif­fer­ent, and nei­ther pro­vides a tem­plate for the oth­er.

Guyana is al­ready a ma­jor oil pro­duc­er and is now con­fronting im­por­tant ques­tions about its gas re­sources: un­der­stand­ing the tech­ni­cal and com­mer­cial re­source base, de­ter­min­ing how and when gas should be de­vel­oped, match­ing in­fra­struc­ture to re­al­is­tic sup­ply, and de­cid­ing how gas can sup­port pow­er, in­dus­tri­al­i­sa­tion and broad­er na­tion­al de­vel­op­ment with­out pre­ma­ture­ly clos­ing off fu­ture op­tions.

Namib­ia is at an ear­li­er stage of its pe­tro­le­um jour­ney. Its off­shore dis­cov­er­ies have cre­at­ed enor­mous ex­pec­ta­tions, but al­so im­por­tant choic­es about the pace and se­quenc­ing of de­vel­op­ment, the re­la­tion­ship be­tween oil and gas, re­source as­sur­ance, in­fra­struc­ture, do­mes­tic gas use, in­dus­tri­al­i­sa­tion, lo­cal ca­pa­bil­i­ty, pric­ing and gov­er­nance. I have ar­gued there for gas mas­ter plan­ning and for what I de­scribe as Up­stream Re­source Or­ches­tra­tion: the State de­vel­op­ing the ca­pa­bil­i­ty to un­der­stand and man­age mul­ti­ple dis­cov­er­ies and de­vel­op­ments as parts of a na­tion­al re­source port­fo­lio rather than as a col­lec­tion of in­di­vid­ual projects.

Dif­fer­ent coun­tries, dif­fer­ent re­sources and dif­fer­ent stages of de­vel­op­ment. Yet many of the lessons I have been draw­ing on in both places come from right here.

T&T has more than a cen­tu­ry of pe­tro­le­um ex­pe­ri­ence and over six­ty years of in­ten­sive gas-based in­dus­tri­al de­vel­op­ment. We have ex­pe­ri­enced ex­plo­ration booms and slow­downs, re­source growth and de­cline, petro­chem­i­cal and LNG ex­pan­sion, pe­ri­ods of gas sur­plus fol­lowed by short­age, State par­tic­i­pa­tion, chang­ing fis­cal regimes, lo­cal-con­tent ini­tia­tives and suc­ces­sive ef­forts to cap­ture more na­tion­al val­ue from the sec­tor.

We have ex­pe­ri­enced ex­plo­ration booms and slow­downs, re­source growth and de­cline, petro­chem­i­cal and LNG ex­pan­sion, pe­ri­ods of gas sur­plus fol­lowed by short­age, State par­tic­i­pa­tion, chang­ing fis­cal regimes, lo­cal-con­tent ini­tia­tives and suc­ces­sive ef­forts to cap­ture more na­tion­al val­ue from the sec­tor.

We there­fore pos­sess some­thing emerg­ing pro­duc­ers can­not yet ob­tain from their own ex­pe­ri­ence: hind­sight. We can see what some ap­par­ent­ly sen­si­ble de­ci­sions look like 20 or 30 years lat­er. We know the con­se­quences when com­mit­ments run ahead of re­source sup­ply, when ex­plo­ration and re­source re­place­ment slow, when in­fra­struc­ture and re­sources are planned sep­a­rate­ly, and when the in­sti­tu­tions rep­re­sent­ing the re­source own­er do not pos­sess suf­fi­cient in­for­ma­tion, ca­pa­bil­i­ty or co­or­di­na­tion to see the whole pic­ture.

That is why my mes­sage in both coun­tries has gone be­yond sim­ply pro­duc­ing hy­dro­car­bons. It has been about un­der­stand­ing the re­source be­fore com­mit­ting it; match­ing in­fra­struc­ture and mar­kets to re­al­is­tic sup­ply; in­te­grat­ing gas de­vel­op­ment with wider na­tion­al de­vel­op­ment; man­ag­ing re­sources as a port­fo­lio; build­ing in­de­pen­dent State ca­pa­bil­i­ty; and en­sur­ing that lo­cal par­tic­i­pa­tion even­tu­al­ly de­vel­ops in­to com­pet­i­tive na­tion­al ca­pa­bil­i­ties that can sur­vive be­yond the con­struc­tion or op­er­a­tion of a sin­gle project.

These are lessons ac­cu­mu­lat­ed at con­sid­er­able na­tion­al cost. They should not be treat­ed mere­ly as his­to­ry.

At pre­cise­ly the time that T&T's ex­pe­ri­ence is help­ing to in­form dis­cus­sion in emerg­ing pe­tro­le­um provinces, we need to look again at what that ex­pe­ri­ence is telling us at home. Some lessons re­main valid. Some mis­takes should not be re­peat­ed. And some ap­proach­es de­signed for an­oth­er era need to be re­con­sid­ered al­to­geth­er.

Our ac­cu­mu­lat­ed pe­tro­le­um ex­pe­ri­ence is it­self an eco­nom­ic as­set. Prop­er­ly used, it can im­prove our de­ci­sions at home while be­com­ing an ex­portable ca­pa­bil­i­ty abroad. Per­haps that, too, is some­where we should be look­ing for val­ue.

Ex­pe­ri­ence can earn for­eign ex­change

If our ac­cu­mu­lat­ed pe­tro­le­um ex­pe­ri­ence is an as­set, its val­ue should not end at im­prov­ing our own de­ci­sions. T&T has spent decades de­vel­op­ing geo­sci­en­tists, en­gi­neers, op­er­a­tors, ma­rine and lo­gis­tics ca­pa­bil­i­ty, fab­ri­ca­tors, con­trac­tors, pro­fes­sion­al ad­vis­ers, train­ers and in­sti­tu­tions around a com­plex oil, gas, LNG and petro­chem­i­cal sys­tem. Those ca­pa­bil­i­ties can earn for­eign ex­change too.

This is where the tra­di­tion­al idea of lo­cal con­tent needs to evolve. The ob­jec­tive can­not be on­ly to se­cure a share of ex­pen­di­ture in­side this coun­try. Ma­ture ca­pa­bil­i­ties should in­creas­ing­ly be able to com­pete across a re­gion­al mar­ket - in Guyana, Suri­name, Venezuela and else­where - through en­gi­neer­ing, op­er­a­tions and main­te­nance, ma­rine and sub­sea ser­vices, geo­science, project man­age­ment, train­ing, gov­er­nance sup­port, tech­nol­o­gy and pro­fes­sion­al ser­vices.

The re­gion­al op­por­tu­ni­ty is there­fore larg­er than im­port­ing ad­di­tion­al mol­e­cules. It in­cludes ex­port­ing what T&T knows how to do.

Five years ver­sus 30

The last ques­tion de­serves par­tic­u­lar at­ten­tion be­cause pe­tro­le­um does not op­er­ate ac­cord­ing to an elec­toral cal­en­dar. An ex­plo­ration pro­gramme ini­ti­at­ed un­der one ad­min­is­tra­tion may pro­duce a dis­cov­ery un­der an­oth­er, be de­vel­oped un­der a third and con­tin­ue pro­duc­ing through sev­er­al more. A gas field, LNG train, petro­chem­i­cal plant or pipeline can op­er­ate for decades.

The po­lit­i­cal cy­cle may be five years. The pe­tro­le­um in­vest­ment and re­source-man­age­ment cy­cle can be 20, 30 years or more.

This does not mean gov­ern­ments should be pre­vent­ed from chang­ing pol­i­cy. Bad pol­i­cy should be changed, and chang­ing cir­cum­stances some­times de­mand a dif­fer­ent ap­proach. But the fun­da­men­tal di­rec­tion of na­tion­al en­er­gy strat­e­gy - re­source re­new­al, val­ue cre­ation, trans­paren­cy, com­pet­i­tive in­vest­ment con­di­tions, bet­ter use of in­fra­struc­ture, de­vel­op­ment of na­tion­al ca­pa­bil­i­ty and stew­ard­ship of pe­tro­le­um wealth - should not have to be re­dis­cov­ered af­ter every elec­tion.

What we need is suf­fi­cient na­tion­al agree­ment on the strate­gic di­rec­tion that gov­ern­ments can dif­fer le­git­i­mate­ly over how to get there with­out re­peat­ed­ly chang­ing the des­ti­na­tion. That mat­ters to in­vestors con­tem­plat­ing com­mit­ments ex­tend­ing through sev­er­al po­lit­i­cal cy­cles, but in­creas­ing­ly al­so to neigh­bour­ing coun­tries with which T&T may share re­sources, in­fra­struc­ture, mar­kets and com­mer­cial op­por­tu­ni­ties.

Two clocks, one na­tion­al in­ter­est

Po­lit­i­cal cy­cle: about five years.

Pe­tro­le­um and in­fra­struc­ture cy­cle: of­ten twen­ty, thir­ty years or more.

The im­pli­ca­tion: gov­ern­ments can dif­fer over pol­i­cy in­stru­ments, but the coun­try ben­e­fits when broad strate­gic di­rec­tion sur­vives changes of ad­min­is­tra­tion.

En­er­gy is a sys­tem, not sim­ply a tax base

Per­haps the com­ing Bud­get should there­fore en­cour­age us to stop treat­ing en­er­gy prin­ci­pal­ly as a sec­tor from which Gov­ern­ment col­lects tax­es. It is an eco­nom­ic sys­tem com­pris­ing re­sources, in­fra­struc­ture, pri­vate com­pa­nies, State en­ter­pris­es, skills, tech­nol­o­gy, fis­cal in­stru­ments, in­ter­na­tion­al re­la­tion­ships and more than a cen­tu­ry of ac­cu­mu­lat­ed knowl­edge.

Parts of that sys­tem are de­clin­ing. Parts are un­der­used. Some may be leak­ing val­ue. Oth­ers may con­tain op­por­tu­ni­ties we have not yet prop­er­ly recog­nised.

The Min­is­ter's chal­lenge is there­fore larg­er than choos­ing the oil and gas price as­sump­tions that help bal­ance the Bud­get. It is whether fis­cal pol­i­cy, en­er­gy pol­i­cy and man­age­ment of the State's as­sets can work to­geth­er to repo­si­tion the whole sys­tem to gen­er­ate more sus­tain­able rev­enue, more for­eign ex­change, more in­vest­ment and greater re­tained na­tion­al val­ue.

Seen this way, pe­tro­le­um wealth is not on­ly the cash gen­er­at­ed by to­day's pro­duc­tion. It al­so in­cludes the re­serves we re­new, the in­fra­struc­ture we main­tain, the in­sti­tu­tions we strength­en, the ca­pa­bil­i­ties we build, the re­la­tion­ships we de­vel­op and the knowl­edge we car­ry from one gen­er­a­tion of the in­dus­try to the next.

Over the com­ing days, this se­ries will re­turn to that wider de­f­i­n­i­tion of val­ue: where rev­enue may be leak­ing, how more val­ue can be cre­at­ed down­stream of ex­ist­ing mol­e­cules and plants, how the State can co­or­di­nate its pe­tro­le­um in­ter­ests more ef­fec­tive­ly, and how Trinidad and To­ba­go can po­si­tion it­self in a chang­ing re­gion­al en­er­gy econ­o­my.

The chal­lenge is to move from wind­fall to wealth - and from ex­pe­ri­ence re­mem­bered to ex­pe­ri­ence used.

Ref­er­ences

1. In­ter­na­tion­al Mon­e­tary Fund, Trinidad and To­ba­go: 2026 Ar­ti­cle IV Con­sul­ta­tion - Press Re­lease; Staff Re­port; and State­ment by the Ex­ec­u­tive Di­rec­tor for Trinidad and To­ba­go, IMF Coun­try Re­port No. 26/120, 2026. The as­sess­ment dis­cuss­es the near-term ben­e­fit of stronger en­er­gy prices along­side the longer-term struc­tur­al chal­lenges as­so­ci­at­ed with en­er­gy-sec­tor per­for­mance and the pub­lic fi­nances.

2. Nor­we­gian Min­istry of Fi­nance, The Gov­ern­ment Pen­sion Fund and ma­te­r­i­al on Nor­way's fis­cal-pol­i­cy frame­work. Nor­way's pe­tro­le­um rev­enues are trans­ferred to the Gov­ern­ment Pen­sion Fund Glob­al, while the fis­cal frame­work reg­u­lates trans­fers from the Fund to the cen­tral-gov­ern­ment bud­get.

An­tho­ny E. Paul is chair­man of the Lloyd Best In­sti­tute of the Caribbean (In­de­pen­dent Thought for Caribbean Free­dom) and en­er­gy gov­er­nance, pol­i­cy and strat­e­gy ad­vi­sor