Senior Reporter
andrea.perez-sobers@guardian.co.tt
Energy economist Gregory McGuire has warned that talk of an impending energy boom in Trinidad and Tobago is premature, arguing that new oil and gas projects will largely replace declining production rather than deliver significant growth.
McGuire also criticised the Government’s 2027 Budget for failing to advance economic diversification adequately, questioning the allocation of funding to cultural industries and agriculture while warning that the country cannot depend indefinitely on its hydrocarbon resources.
Speaking on CNC3’s Morning Brew, McGuire, principal consultant of VSL Consultants Ltd and chairman of the Trinidad and Tobago Extractive Industries Transparency Initiative, maintained that increased gas production must be matched by sufficient demand from downstream industries.
He estimated that gas production could reach approximately three billion to 3.1 billion cubic feet per day by late 2027 or early 2028, up from current production of about 2.4 billion to 2.5 billion cubic feet per day.
However, he cautioned that this would not necessarily represent a boom, particularly if existing downstream plants remained closed or operating below capacity.
“Talk of boom is really idle talk,” McGuire warned, stressing that gas must have a market once it is produced.
He explained that previous periods of energy expansion were driven by both increased production and investment in downstream industries, including Atlantic LNG, ammonia and methanol plants.
A sustainable expansion, he argued, requires investment across the energy value chain rather than an exclusive focus on bringing new fields into production.
On the proposed reopening of the former Petrotrin refinery, now owned by Guaracara Refining Company, McGuire maintained that the 2027 Budget had brought the country no closer to restarting operations than it was a year ago.
He distinguished the refinery from the former Petrotrin entity, noting that Heritage Petroleum manages exploration and production, while Paria Fuel Trading handles the import and distribution of fuels.
McGuire recalled that the previous administration had shortlisted Oando as a preferred buyer, with access to crude oil and capital, before it terminated the process and began a new search for investors.
He acknowledged that the refinery had been financially troubled before it closed, describing it as far less efficient than international facilities.
The refinery faced challenges involving management, staffing, ageing equipment and safety, while earlier modernisation projects had added to its financial burden.
McGuire said importing crude oil at international prices and exporting refined products did not guarantee profitability.
If processing costs were too high, the refinery could purchase crude and sell finished products at a loss.
The decision to restart operations, therefore, must be grounded in commercial viability and the investment required to make the facility competitive, he argued.
Turning to the wider energy sector, McGuire cautioned against building expectations around potential oil discoveries offshore Guyana and T&T.
He said exploration could yield significant resources, given the geological similarities between the areas, but indicated that any potential gains would be several years away, possibly in 2029 or 2030.
He also warned that quoting the maximum production capacity of new projects could create an exaggerated impression of growth, since wells must ramp up production and existing fields continue to decline naturally.
Renewable energy could help address the country’s gas constraints, McGuire argued, particularly through large-scale solar power projects that would reduce the volume of natural gas required for electricity generation and free up supplies for other uses.
T&T’s strongest renewable energy opportunity lies in solar power, he added, although wind energy has yet to attract investment projects.
McGuire, who owns an electric vehicle, also dismissed concerns about driving range and charging infrastructure as overstated for a country as geographically small as T&T. He described the savings from switching to an electric vehicle as substantial and predicted that electric mobility would become increasingly commonplace.
On diversification, McGuire expressed disappointment with the Government’s second budget, arguing that the administration had not delivered sufficiently on sectors it had identified as priorities.
He questioned whether spending on cultural industries was too heavily concentrated on Carnival and related activities, arguing that the country needed to generate foreign exchange from its cultural assets throughout the year.
He renewed his call for a Carnival museum, which he maintained could help develop the sector beyond the annual festival.
Agriculture also required greater attention, McGuire argued, pointing to the absence of a detailed report on progress with the 15 products the Government had previously identified for development.
He further contended that the 2027 Budget’s allocation for agriculture was lower than the allocation in the 2024 Budget.
McGuire said successive governments had failed to pursue diversification with sufficient urgency, warning that oil and gas resources would eventually be depleted.
He argued that T&T must save more of its current energy earnings while investing in productive sectors capable of generating sustainable income and foreign exchange long after hydrocarbon production declines.
