Kevin Ramnarine
At the time of the writing of this article the Prime Minister and his delegation were in Caracas to sign the Dragon gas deal. Should the Dragon deal succeed it will be to the benefit of all citizens. I have many questions on the deal related to various types of risk. At all times, such arrangements must safeguard the national interest. I will however say that overall, it's a step in the right direction.
In my incarnation as Energy Minister I can attest that former Prime Minister Kamla Persad-Bissessar always pressed President Nicolas Maduro at every opportunity on the Loran/Manatee matter. Thanks to her, substantial progress was made. Dragon is however very different from Loran/Manatee.
The driving motivation behind the Government's desire to get Venezuelan natural gas to come to T&T is the shortage of natural gas in this country. Natural gas is the most important commodity we produce. Our peak natural gas production was in the year 2010. Production has been declining ever since for different reasons explained below. This has manifested itself in shortages at both Point Lisas and Atlantic for the past five years.
I have written on this topic of the shortage and I have spoken about it at length as this country's Minister of Energy. For the purposes of the public record, in the interest of the National Gas Company (NGC) and in the wider national interest, I will again seek to enlighten. I do this because of gross misinformation that was presented to the Parliament last Friday.
Firstly, it wrong to say that nothing was done to deal with this shortage. To spout such misinformation is to condemn BP, the NGC and the Ministry of Energy. A tremendous amount of work was done to get the upstream ticking again after it had paused in 2009 to 2010. In fact, at one point in 2010 there was no drilling taking place offshore–not a single rig. To get the upstream drilling again the former PP Government provided incentives using the tax/ fiscal regime. Note that as far back as 2003, the industry had been for asking for incentives and warning the Manning administration that the situation we find ourselves in today would manifest.
Secondly, in April 2010, the worst oil spill in the history of the American oil industry happened and the company at the centre of the disaster was BP. As a consequence of that oil spill, BP in T&T embarked on an extensive maintenance programme that went into 2014. This maintenance programme led to interruptions in natural gas supply as there were turnarounds on platforms and hubs. It was said in Parliament last Friday that the curtailment in natural gas supply had nothing to do with maintenance. This is wrong and is an attempt at historical revisionism (albeit a poor one).
The thousands of people working in the upstream part of the industry (many of whom read this column and give me feedback) can testify that there was a maintenance programme and it impacted on deliverability of natural gas. All one has to do is to Google the terms "bpTT and maintenance" and it brings up press releases from bpTT as well as stories in the Oil and Gas Journal about the maintenance programme and its impact on natural gas supply. In fact in October 2013, Bob Dudley, the CEO of BP, visited this country at the end of the turnaround of the Cassia B Hub and praised his staff for bringing in that turnaround ahead of time. That turnaround (maintenance) impacted natural gas supply in September 2013. While this maintenance was painful for T&T it was understandably necessary from a safety perspective.
Maintenance is however one dimension of the current curtailment issue. The second factor was alluded to by bpTT in a press release dated September 19, 2014. According to bpTT: "The lower production that has resulted in the gas curtailments recently experienced by both Pt Lisas and Atlantic (LNG) is primarily a result of a pause in new investment in recent years by upstream producers, including bpTT due to the culmination of many factors which created an unfavourable investment climate".
bpTT went on to say: "Maintenance activity necessary to ensure continued safe and reliable operations has contributed to the current gas curtailments, however it is not the primary factor."
The question we must ask is when did this pause in investment take place and when was there an unfavourable investment climate. The period of the "pause in investment" was 2010 and before. It was during the period 2003 to 2010 that the industry warned the Manning PNM administration that we would end up in this situation if incentives weren't provided. These are facts. Ask the CEOs past and present of the major upstream companies in T&T and they will tell you what happened.
I will close by stressing (again) that we stop using the energy sector and the economy to score political points. In the current economic environment such actions bear no value for the people of T&T. The people yearn for leadership that can present a credible road map out of the economic conundrum we find ourselves in. They sent a powerful message on November 28, 2016.
– Kevin Ramnarine is a former Minister of Energy of T&T