Small in­de­pen­dent oil and gas op­er­a­tors have ex­pressed dis­ap­point­ment with the 2019/2020 fis­cal pack­age say­ing it was de­void of in­cen­tives for in­vestors.

So said se­nior geo­sci­en­tist at Touch­stone Ex­plo­ration Xavier Moo­nan, dur­ing a post bud­get in­ter­view with Guardian Me­dia yes­ter­day.

Touch­stone Ex­plo­ration has been in­volved in a trans­for­ma­tion­al drilling pro­gramme which has the po­ten­tial to sig­nif­i­cant­ly in­crease T&T’s oil and nat­ur­al gas pro­duc­tion for the next five years.

Moo­nan said,“The bud­get from a small oil and gas com­pa­ny and from small in­de­pen­dent op­er­a­tors per­spec­tive has been dis­ap­point­ing. There is vir­tu­al­ly no new in­cen­tives to dri­ve on­shore oil op­er­a­tions back to high­er heights.”

Moo­nan said some youths were in favour of form­ing oil com­pa­nies of their own. “While this is very pos­si­ble and may hap­pen in the near fu­ture, such risks need to be fa­cil­i­tat­ed by the Min­istry of En­er­gy. Acreage needs to be of­fered, and of­fered with small in­de­pen­dents in mind. So the terms of those leas­es need to be draft­ed to suit small in­de­pen­dents,” he said.

Moo­nan said cur­rent­ly half of Her­itage on­shore oil pro­duc­tion is from small in­de­pen­dent op­er­a­tors.

“They have been leased blocks from Her­itage. More should be leased and the process of ap­provals for drilling on those blocks should be made more ef­fi­cient. We need to cre­ate an ef­fi­cient en­vi­ron­ment so that small op­er­a­tors see an ad­van­tage in in­vest­ing in T&T,” he added.

Moo­nan al­so not­ed: “ Val­ue Added Tax (VAT ) ar­rears in the form of gov­ern­ment bonds with a 1.5 per cent in­ter­est per an­num is a means by which the gov­ern­ment is try­ing to re­pay but its not at­trac­tive to com­pa­nies.” He added, “but it is bet­ter than noth­ing.”

Moo­nan fur­ther said the change in SPT de­ductibil­i­ty from 20 to 25 per cent is wel­comed but it doesn’t yield much of a pos­i­tive out­come for in­vest­ment over­all.

“The change in Cap­i­tal al­lowance from 50/30/20 to 20/20/20/20/20 will damper short term in­vest­ment and rein­vest­ment.”

He added, “From a young pro­fes­sion­al per­spec­tive there doesn’t seem to be any­thing new. The same projects are still be­ing rolled out. In some cas­es the dig­i­tal­i­sa­tion of Gov­ern­ment busi­ness is ac­tu­al­ly hap­pen­ing so that is pos­i­tive, but it needs to hap­pen faster.”

Moo­nan said youths of T&T want­ed to see more trans­paren­cy in gov­ern­ment busi­ness. The gas con­tracts and the de­tails of oil and dis­cov­er­ies should be man­dat­ed by Min­istry of En­er­gy and En­er­gy In­dus­tries (MEEI) to be pub­lished.

“We need to re­store con­fi­dence in our en­er­gy sec­tor since its still the pil­lar for growth. The clo­sure and then sale of the re­fin­ery should have been crys­tal clear and not shroud­ed in se­cre­cy.”

Moo­nan said the coun­try as still await­ing de­tails on the re­la­tion­ship be­tween Her­itage, Paria and the new re­fin­ery op­er­a­tor.

“Will the oil be­ing pro­duced by Her­itage and oth­er op­er­a­tors be man­dat­ed to be sold to this re­fin­ery? Will the prices that com­pa­nies are get­ting now be main­tained?” Moo­nan asked.

He said the gov­ern­ment should keep in­vest­ments at­trac­tive to small oil and gas op­er­a­tors who have suc­cess­ful­ly ex­ploit­ed ex­ist­ing oil wells.