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Upstream investment in Trinidad & Tobago dried up before 2010 -Ramnarine

 

 


PORT SPAIN
Petroleumworld 04 14 2017

Prime Minister Dr Keith Rowley's statement to Parliament yesterday on the country's gas shortage “conveniently neglects to mention that one of the main reasons we experienced gas shortages from late 2010 to today is the fact that upstream investment dried up from 2008 to 2010”.

In response to Rowley's account of the gas situation which the People's National Movement (PNM) Government encountered when it came into office in September 2015, former energy Minister Kevin Ramnarine said yesterday the former administration had cultivated ­investment in the upstream.

To this end, he said foreign direct investment in the energy sector climbed from US$501 million in 2010 to US$1.5 billion in 2015.

Ramnarine said the gas shorta­ges of 2010 are due to: 1. a period of underinvestment from upstream companies between 2008 to 2010; 2. a massive maintenance program­me conducted by bp from 2010 to 2014; 3. over-contracting of natural gas from 2007 to 2009 by NGC with BG, EOG and BHP.

With regard to expired NGC contracts, Ramnarine said one MHTL contract, the M4 plant contract, expired in 2013 and two in December 2015. “If this is such a big issue, why have they (the PNM) not yet renewed these expired contracts, given that they have been in office for over 20 months and counting?” he asked.

Ramnarine observed Rowley said he was part of a negotiation with EOG Resources to determine a natural gas price that was hitherto not achievable between EOG ­Resources and the NGC.

“Price negotiation is the role and remit of the National Gas Company, not the Prime Minister. It is improper for the Prime Minister to be directly involved in natural gas price negotiations with EOG Resources. This is a dangerous precedent that is being set,” he said.

No reason for celebration

Ramnarine further denied the 100-per cent capital allowance for exploration, given under the Partnership administration, affected the country's revenue.

“How is that possible when the two bp exploration wells are being drilled in 2017 and capital allowances can only be applied point forward. What year is he referring to? The Prime Minster seems to be proud that bp is drilling two exploration wells this year, but is critical of the incentives that made them a reality. This demonstrates a dichoto­mous policy position that confused the whole energy sector,” he said.

He labelled Rowley's boast about a commitment from Shell to supply (100 to 105) mmcfd to NGC as a “moot point” because Shell is already contractually obligated to supply 220 mmcfd to NGC under the terms of the 2009 Incremental Gas Sales contract.


“This is therefore no reason for celebration. Shell is supplying within existing contractual terms albeit below contract levels,” he said.

With regard to claims against the NGC made in August 2015, Ramnarine said they were made in circumstances outside the control of the NGC. “The NGC is protected against such claims in its contracts. These claims therefore have to be negotiated in that context. How­ever, statements by the Prime Minister regarding the gas shortage may have the effect of weakening the NGC's defence against these claims.

“It is wrong to misrepresent the facts and the history of the energy sector of the last seven years. The Government must be reminded that they are in office now for 20 months and don't have much to show in the energy sector where they have neither introduced a single new fiscal incentive nor licensed a single square foot of acreage for ­exploration.


“As I have said before, bp's decision to invest US$ 5 billion for the next five years is nothing new and no surprise. Bp has been investing at that rate since 2012 when their confidence in T&T returned,” he said.



Story by Asha Javeed from Trinidad Express

trinidadexpress.com 04 12 2017

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