Trinidad and Tobago truly offers a lesson to Guyana on what not to do with its vast oil and gas revenues, as the twin-island Republic struggles to keep its economy afloat with the earnings being garnered each year.
Its Prime Minister, Dr. Keith Rowley, painted a grim picture of the country’s reliance on revenues from the energy sector, at a recent press conference.
“Without the earnings from [oil, gas and petrochemicals], our budgetary arrangements would be extremely challenging and dire,” the Prime Minister underscored. “So, it is in the interest of Trinidad and Tobago to ensure that the best arrangements are in place in these three areas – we have to understand that we are still heavily dependent…”
The PM and a high-level cabinet team including T&T’s Minister of Energy, Stuart Young, recently returned from a week-long engagement with the top brass from bp, Shell Global and Proman – key stakeholders in the country’s energy sector.
The main objective was to secure T&T’s energy future since the country has been on a shaky path for quite some time.
PM Rowley pointed out that T&T’s oil production has dropped “way, way down” leading to a drop in its natural gas production. He pointed out that T&T once produced 4.2 billion cubic feet of natural gas but with mature fields and no new discoveries – that number fell to 2.9 billion.
Rowley said the fact that the T&T government does not produce gas, leaving the production in the hands of other decision-makers, makes it imperative for the government to be seated at the table which those very decisions are made.
If not, T&T’s situation could get even worse, according to Rowley.
TT has compiled data to show that its current gas output is deemed sustainable for the time being.
But Rowley said, “if we do not make decisions…now and…the investments, the diagram shows that by 2026, 2027, 2028, the levels of gas that will be available in Trinidad and Tobago – if no new improvements are had – will have far-reaching consequences for government revenues and I dare say, for the quality of life of all the people of Trinidad and Tobago.”
Rowley said, this is why the government has been working hard to change where the country seems to be headed.
TT’s former Energy Minister Kevin Ramnarine has said the country’s current gas production is the lowest in 18 years and that it would be very difficult to see that number move past 3 billion cubic feet per day anytime soon.
On the other hand, Guyana, a newcomer to the global oil and gas arena, is working to ensure that it does not end up like TT. Guyana’s Vice President, Dr. Bharrat Jagdeo had even gone so far as to say that TT’s economy was in shambles, further exacerbated by economic shocks that have hit the global markets.
Dr. Jagdeo even doubled down and said, “I don’t know if they have a problem with truth, but the fact of the matter is that the economy is undiversified and it relies heavily on oil and gas and when the prices fall, things start to fall apart, and they are facing some of those consequences now.”