TRINIDAD and Tobago needs to migrate its generation of electricity away from gas-fired power generation to toward renewable energy.
This according to former energy minister Kevin Ramnarine in a statement about the oil and gas industry on Wednesday.
He said, “Trinidad and Tobago also needs to migrate its power generation away from gas-fired power generation towards renewable.
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“This transition as a priority must begin to take effect in the early 2020s and continue throughout the course of this decade.”
Ramnarine also noted that BP on Tuesday announced specifics around its “net zero carbon” strategy.
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He said this marked a major change in the business model of BP as it planned for the shift to a lower carbon world.
Ramnarine said the announcement came against the backdrop of massive losses for BP in the first half of 2020 which were related to Covid-19.
BP announced that its investment profile would:
(1) Shift towards low carbon investments to reach about $US 5 billion by 2030. It is currently about $US 0.5 billion
(2) Reduce their current global level of hydrocarbon production by 40% by 2030.
(3) Lower emissions from operations by 30 to 35% by 2030 compared to 2019 levels.
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What does this mean for T&T?
Ramnarine said, “This means BP would be spending less money on their traditional oil and gas business and more on low carbon investments.
“The implication for TT is clear, the BPTT subsidiary in Port-of-Spain will have to fight harder to get capital investment approved for TT.
“It is already hard to make that case given the performance of our natural gas sector in the last five years. It now becomes harder.”
He said, “The second major shift is the planned phased reduction (by 40%) of oil and gas production. While there is no immediate threat to the business in TT, it means the company will keep those assets that give the best value for the investment dollar.”
Ramnarine noted that BP also planned to reduce its production from around 2.6 million barrels of oil equivalent per day in 2019 to 1.5 million barrels of oil equivalent per day by 2030. This is an overall 40% drop, he said.
Listen to former energy minister Kevin Ramnarine:
He said, “It is worth noting that TT accounts for around 13% of BP’s current global production.
“This means BPTT would have to drive value optimisation and cost efficiency in the coming years if it wants to stay alive. This requires working with other industry stakeholders and the Government of TT.
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“The decade of the 2020’s will be one of change in the global energy business and we must ask ourselves in TT whether we will be bystanders or active participants.
“There can be no doubt that what happens in BP will affect TT.”
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