T&T Govt. to renegotiate three more agreements with oil companies

Jun 19, 2019 News

The Government of Trinidad and Tobago was recently successful in renegotiating marketing arrangements with Atlantic LNG, a move that will result in a projected US$118M of incremental revenues to the National Gas Company of T&T (NGC), according to T&T Minister of Energy and Energy Industries, Franklin Khan.
NGC is a major shareholder in Atlantic LNG.

T&T Minister of Energy and Energy Industries, Franklin Khan

Next, NGC, through its ‘Empowered Negotiation Teams’, will embark on a second phase of negotiations with the other major shareholders of Atlantic LNG: BP and Royal Dutch Shell.
In explaining the need for renegotiation last year, T&T Prime Minister Keith Rowley said, “There’s a role for the government in ensuring that the people of Trinidad and Tobago, while being participants in this very lucrative business, get more than crumbs that fall off the table”.
Atlantic LNG has four liquefaction facilities (trains), and each has its own marketing arrangements. T&T was successful in renegotiating the agreement for Train 1.
Minister Khan, in an address to the T&T House last Tuesday, said that the shareholders are now set to discuss and review agreements for Trains 2, 3 and 4, with no pushback from the oil companies.
Government had received criticisms from the political opposition, the United National Congress (UNC), that the move to renegotiate would scare away investors, and that it would violate the sanctity of contracts.
Minister Khan fought back against those criticisms, explaining that the government had been working assiduously on the relationships with the oil companies. He said that it was necessary to build a platform of mutual respect, “and an ability to sit in the same room as equals with these sophisticated multinational companies”.
Minister Khan said that, “… consequent on Government’s push for an improved revenue stream and after months of complex and challenging negotiations, there was agreement that Shell would enhance the revenue to the Government, these enhancements are estimated at approximately US$944.7 million over the period 2018 to 2027.”
Khan relayed to the House that Phase 2 of negotiations will entail the restructuring of the four LNG trains into a single unit, with the primary aim to ensure that NGC gains more.
When Kaieteur News related T&T’s success with the Director General of the Ministry of the Presidency, Joseph Harmon, he said that Prime Minister Rowley’s reason for renegotiating was that there was a “changed circumstance”.
He said that the “changed circumstance” for the Government of Guyana would occur if the State Assets Recovery Agency (SARA) finds “something illegal”. The question posed to Harmon was whether Government would initiate an investigation to respond to the alleged illegalities in the Production Sharing Agreement for the Stabroek concession. These alleged illegalities were posited by political commentators Christopher Ram and the Transparency Institute Guyana Initiative (TIGI).
Harmon neglected to answer for the Stabroek concession, repeating that government will only act on findings from SARA, despite being reminded that SARA is not investigating the Stabroek concession.

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