Lead­ing en­er­gy ex­pert An­tho­ny “Tony” Paul is call­ing on T&T to fix its gov­er­nance frame­work for the sec­tor, by up­dat­ing the laws and reg­u­la­tions and mak­ing the Min­istry of En­er­gy and En­er­gy In­dus­tries more trans­par­ent and ac­count­able.

Un­for­tu­nate­ly, those who are re­spon­si­ble for mak­ing the changes are the same ones com­fort­able with the sta­tus quo in which they can do what­ev­er they want with­out con­se­quence, Paul told the Sun­day Busi­ness Guardian.

Paul is the prin­ci­pal con­sul­tant at the As­so­ci­a­tion of Caribbean En­er­gy Spe­cial­ists (ACES) Ltd, a lead­ing Caribbean oil, nat­ur­al gas and pow­er ad­vi­so­ry firm, based in T&T.

To­mor­row, the T&T En­er­gy Cham­ber will host its sig­na­ture event, the T&T En­er­gy Con­fer­ence ti­tled, “Nav­i­gat­ing a com­plex en­er­gy fu­ture.”

Among the at­ten­dees will be the Pres­i­dent of Guyana Dr Mo­hamed Ir­faan Ali.

Ac­cord­ing to Paul, who has worked in East, West and South­ern Africa, the Mid­dle East, Cen­tral and South­east Asia, Latin Amer­i­ca and the Caribbean, T&T’s en­er­gy sec­tor is very poor­ly gov­erned, with the mech­a­nisms used for de­ci­sion-mak­ing and act­ing fun­da­men­tal­ly flawed in many ways, and have been so for more than a decade now.

Say­ing there seems to be no de­sire, far less in­ten­tion to fix them, Paul iden­ti­fied the root cause of the in­dus­try’s de­cline in that pe­ri­od as the col­lapse of its gov­er­nance sys­tem.

Both el­e­ments of the sys­tem (leg­isla­tive and ad­min­is­tra­tive) are out­dat­ed and lack­ing in ba­sic re­quire­ments, he said.

For in­stance, Paul said the Pe­tro­le­um Act of 1969 and the Reg­u­la­tions of 1971 have nev­er been up­dat­ed, on­ly hav­ing min­i­mal amend­ments, and fail­ing to close gaps, such as the glar­ing ab­sence of Reg­u­la­tions for the Nat­ur­al Gas seg­ment.

Even so, he added, some key parts of the law and reg­u­la­tions are not be­ing im­ple­ment­ed or ad­hered to by the in­dus­try, leav­ing T&T in a per­ilous state, un­be­knownst to most of the pop­u­la­tion.

“For in­stance, even though the law re­quires all op­er­a­tors in the sec­tor and their con­trac­tors or agents to be li­censed, not a sin­gle op­er­a­tor in Pt Lisas nor any of the con­trac­tors or agents are li­censed, re­sult­ing in the min­istry be­ing un­able to reg­u­late them (due to the na­ture of the leg­is­la­tion) or prop­er­ly de­ter­mine their tax li­a­bil­i­ty,” Paul said.

He al­so not­ed that one oth­er con­se­quence of these fail­ings is that se­nior ex­ec­u­tives in the State sec­tor and Gov­ern­ment spend many days and weeks ne­go­ti­at­ing terms that are rou­tine­ly part of the reg­u­la­to­ry frame­work in nat­ur­al gas pro­duc­tion, dis­tri­b­u­tion and sales around the world.

“Reg­u­la­tions pro­vide for a trans­par­ent, con­sis­tent and pre­dictable op­er­at­ing en­vi­ron­ment, which in­vestors al­ways ask for, while ne­go­ti­a­tions are al­ways won by those with more and bet­ter re­sources,” Paul fur­ther ex­plained.

An­oth­er chal­lenge he said was the Min­istry, as reg­u­la­tor, is op­er­at­ing with sys­tems that were de­signed in the 1960’s and ear­ly 70’s and in­ad­e­quate for the mod­ern world, man­aged with “many square pegs in round holes, with no ac­count­abil­i­ty to the pop­u­la­tion.”

“It used to be said that Trinidad was a grave­yard for ge­ol­o­gists. The Min­istry of En­er­gy is now a grave­yard for young, bright tal­ent,” Paul not­ed adding, “There is no suc­ces­sion plan­ning and lit­tle or no ev­i­dence of trans­fer of knowl­edge or re­spon­si­bil­i­ty to a younger gen­er­a­tion.”

Fur­ther, he said at both the tech­ni­cal and po­lit­i­cal lev­els trans­paren­cy and ac­count­abil­i­ty are al­most “non-ex­is­tent” and min­is­ters have tend­ed to de­pend on ad­vice more from their friends in the multi­na­tion­al com­pa­nies than their own tech­nocrats, some­times by-pass­ing the checks and bal­ances built in­to the leg­isla­tive frame­work.

De­clin­ing re­serves

Ac­cord­ing to Paul the im­ped­i­ments around de­clin­ing re­serves, pro­duc­tion, val­ue-ad­di­tion, rev­enue and con­fi­dence are not a func­tion of what’s un­der the ground and/or eco­nom­i­cal­ly re­cov­er­able or even the fis­cal regime that is in place to in­cen­tivise in­creas­ing each of these.

“No mat­ter how good these might be, we won’t get the ben­e­fits due to us if we con­tin­ue to man­age the re­sources like novices or lack self-con­fi­dence or the will to de­ter­mine our own des­tiny,” Paul ex­plained.

He said across the spec­tra of the val­ue and de­ci­sion chains—from at­tract­ing in­vestors, through ne­go­ti­at­ing and con­tract­ing them, over­see­ing their op­er­a­tions and max­imis­ing and se­cur­ing the ben­e­fits avail­able to T&T, “we are mak­ing rook­ie mis­takes and hid­ing them be­hind a false cur­tain of con­fi­den­tial­i­ty.”

Paul re­it­er­at­ed that while this coun­try has a rich his­to­ry of fan­tas­tic per­for­mance, “those in charge seem dis­con­nect­ed from the lessons those ex­pe­ri­ences should be teach­ing us.”

Cap­i­tal­is­ing deep­wa­ter and shal­low wa­ter

Ac­cord­ing to Paul suc­cess in ex­plo­ration has al­ways been dri­ven by col­lect­ing, pro­cess­ing, analysing and in­ter­pret­ing as much da­ta as pos­si­ble, us­ing the best tech­nol­o­gy, process and peo­ple avail­able.

He said most of that da­ta is cur­rent­ly in the hands of three com­pa­nies who have held on to it for over 50 years, in some cas­es.

This, Paul ex­plained, means that new in­vestors (and the coun­try) are go­ing about their busi­ness with one hand tied be­hind their backs.

How­ev­er, the for­mer hy­dro­car­bons se­nior ad­vis­er, at the Na­tion­al Di­rec­torate of Hy­dro­car­bons and Fu­els (DNHC)/Min­istry of Min­er­al Re­sources and En­er­gy (MIREME), Mozam­bique said this does not have to be the case as the Min­istry has le­gal and con­trac­tu­al mech­a­nisms, ap­plied as the norm in oth­er ju­ris­dic­tions, to make da­ta ac­ces­si­ble to those who want to analyse T&T for new in­vest­ment in ex­plo­ration and pro­duc­tion (po­ten­tial li­cence bid­der, for ex­am­ple) and li­censees in ar­eas ad­ja­cent to those where valu­able in­for­ma­tion is avail­able, but not ac­ces­si­ble.

This sit­u­a­tion, im­pacts both shal­low and deep-wa­ter ar­eas, Paul who was al­so a mem­ber, of the Ad­vi­so­ry Pan­el on Lo­cal Con­tent to the Gov­ern­ment of Guyana said.

In ad­di­tion, he added this coun­try’s En­er­gy Min­istry has on sev­er­al oc­ca­sions from the 1990s to re­cent­ly when li­cences were re­newed, al­lowed com­pa­nies to hold on to valu­able ex­plo­ration and pro­duc­tion acreage that they are ei­ther un­able or un­will­ing to ex­plore or de­vel­op, while they are at­trac­tive for oth­er in­vestors.

“New in­vestors are un­able to eco­nom­i­cal­ly mon­e­tise any nat­ur­al gas they may find by us­ing ex­ist­ing in­fra­struc­ture, such as LNG plants and pipelines,” Paul ex­plained.

Such ac­cess he said, will make the many small fields that lie fal­low off the east and south coasts to be de­vel­oped and mon­e­tised, adding that open ac­cess to ex­cess ca­pac­i­ty is a ba­sic fea­ture of Nat­ur­al Gas Reg­u­la­tions around the world.

“There are pro­vi­sions in the T&T Pe­tro­le­um Act that can be trig­gered to in­sti­tute this, but the po­lit­i­cal will seems to be ab­sent,” Paul added.

Oth­er chal­lenges

En­er­gy ex­pert Dr Kr­ish­na Per­sad al­so added that Gov­ern­ment needs to move more swift­ly to im­ple­ment En­hanced Oil Re­cov­ery (EOR) par­tic­u­lar­ly Car­bon Cap­ture and Car­bon Diox­ide (Co2) EOR and se­ques­tra­tion.

“They are putting leg­is­la­tion in place but that will take months. The pace is too slow. They need to bring it (leg­is­la­tion) for­ward and push it through in two weeks,” Per­sad ad­vised.

On Feb­ru­ary 18, 2021, the Cab­i­net agreed to es­tab­lish a Co2 En­hanced Oil Re­cov­ery Steer­ing Com­mit­tee.

The man­date is to man­age the im­ple­men­ta­tion of a large-scale CO2 EOR project to in­crease T&T’s oil rev­enue and to ad­dress the re­duc­tion of car­bon diox­ide emis­sions, car­bon cap­ture and car­bon se­ques­tra­tion.

This coun­try rat­i­fied the Paris Change Cli­mate Agree­ment in Feb­ru­ary 2018, which sig­nalled the coun­try’s com­mit­ment to re­duce its green­house gas emis­sions.

Car­bon cap­ture, util­i­sa­tion and se­ques­tra­tion are seen as in­te­gral to a net ze­ro fu­ture by in­ter­na­tion­al agen­cies such as the In­ter­na­tion­al En­er­gy Agency (IEA) and the In­ter­gov­ern­men­tal Pan­el on Cli­mate Change (IPCC), while be­ing cost-ef­fec­tive and com­mer­cial.

Ad­di­tion­al­ly, Per­sad said Gov­ern­ment needs to en­sure old field in­stal­la­tions and wells are not aban­doned or ne­glect­ed but kept in good con­di­tion for fu­ture EOR.

Fur­ther, he said Her­itage needs to get ex­pert ad­vice to ac­cess its re­source po­ten­tial.

“They need to bring in peo­ple who are equipped and who have deep pock­ets to do so be­cause Her­itage will not have the mon­ey,” Per­sad added.

Us­ing funds go­ing for­ward to di­ver­si­fy in­to green in­vest­ments and switch­ing to 100 per cent re­new­ables as soon as pos­si­ble are oth­er fac­tors which ought to be put in place.

Fur­ther, Per­sad sug­gest­ed that the Her­itage Fund needs to be built up as much as pos­si­ble with a min­i­mum of 10 per cent of gross rev­enues put in­to it every year.

“We need to make sure we are putting mon­ey in­to it and we need to treat it like a pen­sion. We can­not say if we get oil then we will fore­cast,” Per­sad em­pha­sised.

Col­lab­o­ra­tion es­sen­tial—bpTT

The Sun­day Busi­ness Guardian al­so reached out to bpTT on its thoughts about this coun­try’s en­er­gy in­dus­try.

Col­lab­o­ra­tion, it said is es­sen­tial to de­vel­op the in­dus­try as the com­pa­ny not­ed that with­in the past few months it has seen the val­ue of Gov­ern­ment and in­dus­try work­ing to­geth­er.

“And we need to con­tin­ue along that path,” bpTT added.

With 15 off­shore pro­duc­tion plat­forms, it is the coun­try’s largest hy­dro­car­bon pro­duc­er, ac­count­ing for about 55 per cent of the na­tion’s gas pro­duc­tion, ac­cord­ing to its web­site.

“We’ve had quite a busy 2022,” bpTT said adding, “We con­tin­ued to de­liv­er many crit­i­cal gas projects and ac­tiv­i­ties and reached agree­ments on very im­por­tant com­mer­cial mat­ters that now pave the way for con­tin­ued in­vest­ments.

“We see our pur­pose as part­ner­ing with Gov­ern­ment and oth­er stake­hold­ers to un­lock T&T’s en­er­gy fu­ture,” bpTT said.