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Ramnarine: TT Fiscal Regime doesn’t Facilitate Increase in Oil, Gas Production

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Former energy minister Kevin Ramnarine

 

THE Trinidad and Tobago Government has fundamentally misunderstood the energy sector’s fiscal and taxation systems.

This is the view of former energy minister Kevin Ramnarine.

In an interview with AZPNews.com, he said TT’s current fiscal regime does not facilitate the level of investment needed to increase natural gas production and oil production.

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Oil production has declined by 27% in the last four years with most of that decline coming from Petrotrin.

He said while there has been some recovery in natural gas production, it has has not climbed back to 2015 levels.

Ramnarine said, “Regarding natural gas, statements by Claire Fitzpatrick at the recent BPTT technology event have confirmed what I have been saying which is that in 2020 BPTT’s production will be less than what they produced in 2019.

“That is bad news.

“After the bounce provided in 2017 and 2018 by the BP Juniper project, we have again gone into a precarious situation with natural gas production.

“Ms Fitzpatrick has said that we should not expect BPTT to close gap created by the failed 2019 infill drilling programmes in the near term.

“By near term my understanding is 2019 to 2021.

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“We have a big problem in the near term which is a continued shortage and higher prices for natural gas at Point Lisas.

“Had the previous Government not taken decisive action to right side the industry by providing a range of fiscal incentives this country would be producing under three billion cubic feet of natural gas today and that would have been a disastrous situation.

“Those incentives and the investments they stimulated such as Juniper, Angelin and the BPTT exploration wells such as Macadamia, Savannah have kept this country going.

“The exploration success of BPTT in recent years cannot be divorced from the much-criticized accelerated capital allowance for exploration that was provided in 2014.

“The current Government seems to struggle to understand how capital allowances work.

“The actions of the Minister of Finance in the last budget to change the allowances for development wells was a negative step and will disincentivize the oil and gas companies.

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“I am afraid that as Claire Fitzpatrick said there is no relief until 2022 when Matapal comes into production. Even Matapal is a production of the 2014 fiscal incentives.

“In the interim (2019 to 2021) we are facing a bleak situation with natural gas production.”

 

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