Cur­tis Williams

The Gov­ern­ment is be­ing coun­selled not to spend the ad­di­tion­al rev­enue ex­pect­ed to be gen­er­at­ed from Petrotrin's crude oil dis­cov­ery off Trinidad's south­west coast an­nounced on Thurs­day. This ad­vice comes from for­mer en­er­gy min­is­ter Con­rad Enill and econ­o­mist Dr Ronald Ramkissoon.

Both men warn that the Gov­ern­ment must be ju­di­cious in how it us­es the rev­enue from the 'Ju­bilee dis­cov­ery'. Ramkissoon said yes­ter­day this is noth­ing more than a wind­fall, and like some­one who wins the Lot­to, the Gov­ern­ment had to en­sure that most of the mon­ey was saved.

He said: "We must not al­low our imag­i­na­tion to run away with us, as if we have nev­er found oil be­fore. We must learn from the lessons of the past and show we have learnt that we can­not con­tin­ue to throw mon­ey at prob­lems, be­cause that will not solve them.

"Does it mean that this dis­cov­ery will lead to un­rea­son­able wage de­mands and the Gov­ern­ment giv­ing in­to them be­cause it can now af­ford them? And the con­se­quences of that ac­tion for ef­fi­cien­cy in the econ­o­my and in­fla­tion?" Ramkissoon is ad­vis­ing the Gov­ern­ment to place most of the ad­di­tion­al mon­ey it will get from the two finds an­nounced by Bay­field En­er­gy and Petrotrin in the Her­itage and Sta­bil­i­sa­tion Fund (HSF) and fo­cus on grow­ing the fund.

Fi­nance Min­is­ter Win­ston Dook­er­an said ear­li­er this month that the fund's to­tal is US$4 bil­lion. Ramkissoon said T&T can­not make the mis­takes of the past, which oc­ca­sioned the coun­try hav­ing poor­ly-run state com­pa­nies, even though it had mon­ey from oil and gas.

"We have had many larg­er finds up un­til the late 1970s and we have not al­ways used the re­sources in the way in which it should be, and it has not pre­vent­ed us from mak­ing mis­takes in gov­er­nance, cor­rup­tion nor has it re­al­ly al­lowed us to ad­dress many of the so­cial is­sues in terms of pover­ty," he told the T&T Guardian.

Speak­ing at a post-Cab­i­net press con­fer­ence on Thurs­day, Prime Min­is­ter Kam­la Per­sad-Bisses­sar said Petrotrin had made a dis­cov­ery of 48 mil­lion bar­rels of oil in depths of 60 feet off Point Fortin. She re­port­ed the com­pa­ny said it could be pro­duced in one year be­cause of the wa­ter depth, the shal­low well and its prox­im­i­ty to ex­ist­ing in­fra­struc­ture.

Save new oil dol­lars

Enill, who was min­is­ter of en­er­gy in the Patrick Man­ning ad­min­is­tra­tion, said he felt the ad­di­tion­al rev­enue will have to be used to re­duce the deficits Gov­ern­ment has been run­ning for the last three years. To con­tin­ue deficit fi­nanc­ing, was not sus­tain­able, he said.

"We must re­duce our deficit spend­ing, so any­thing we get in terms of ad­di­tion­al rev­enue should be used to re­duce the size of the deficit." Both Enill and Ramkissoon said it was too ear­ly to de­ter­mine the ex­act size of the dis­cov­ery and how much ad­di­tion­al rev­enue it would mean for the Min­is­ter of Fi­nance.

Enill warned there had been times when oil com­pa­nies had an­nounced dis­cov­er­ies that turned out to be small­er than orig­i­nal­ly thought. "I am not say­ing that the dis­cov­ery is not as large as Petrotrin is say­ing, but I do not know that enough test­ing and ap­praisal work have been done for us to be sure about the size of the find, or about the amount of oil that will be pro­duced on a dai­ly ba­sis from the find."

Ramkissoon said his first re­ac­tion was that the dis­cov­ery of ad­di­tion­al re­serves of crude oil was cer­tain­ly pos­i­tive, but cau­tioned that not all the news was nec­es­sar­i­ly pos­i­tive. He said, hav­ing stud­ied the econ­o­my for years, it was nec­es­sary to be cau­tious in in­ter­pret­ing the sig­nif­i­cance of the 'Ju­bilee dis­cov­ery'.

He ar­gued that stud­ies of pe­tro­le­um and nar­row-based economies show that such a dis­cov­ery can have dis­ad­van­tages for the de­vel­op­ment of the econ­o­my. He said there had been re­cent ef­forts to di­ver­si­fy the econ­o­my and he is wor­ried that this dis­cov­ery could lead to a con­tin­ued overde­pen­dence on the en­er­gy sec­tor.

While Enill agreed that it was a net plus for the econ­o­my, he said the coun­try should not be sur­prised, be­cause Petrotrin had for the last few years con­cen­trat­ed on en­sur­ing its re­fined prod­ucts could meet stan­dards to en­ter the Unit­ed States mar­ket and, in the cir­cum­stances, it was now in a po­si­tion to con­cen­trate on ex­plo­ration.