Latest update November 29th, 2024 1:00 AM
PM Rowley tells oil conference… T&T wrestled with oil companies for two years to renegotiate contracts, stop multi-million dollar losses
Kaieteur News – Gas production is at the heart and soul of Trinidad and Tobago’s economic well-being. But the combination of dwindling supplies and the use of a low benchmark price over the years has left the CARICOM nation’s economy limping along.
In an effort to change this state of affairs, T&T’s Prime Minister, Dr. Keith Rowley and his team of experts, took the bold step to strengthen provisions in contracts that would see the Twin Island Republic and its people garnering more benefits. Insight into this level of fearless leadership was provided by Dr. Rowley during his presentation at his homeland’s 2023 Energy Conference. The event was organized by Trinidad and Tobago’s Energy Chamber and held at the Hyatt Hotel for three days starting January 23, 2023.
Trinidad and Tobago’s Prime Minister, Dr. Keith Rowley
Rowley explained that for years, the country relied on the well-known Henry Hub price point for the sale of its gas resources. The Prime Minister said the US benchmark has been declining, much to the detriment of Trinidad and Tobago coffers. He noted that it is predicted to average US$4.90 per Metric Million British Thermal Unit (MMbtu) in 2023 as compared to the average price of US$7.42 per MMbtu in 2022.
The Prime Minister said, “The consistently low Henry Hub price, over the years, is the reason that we have committed so much effort aimed at moving away from Henry Hub and the Spanish fuel prices in the marketing arrangements for gas processed for LNG in the Restructured Atlantic LNG. The history and projections of the new marker prices show that they are superior to Henry Hub and will generate greater revenues for the country.”
He said this has been substantiated by the revenue earned for those Liquefied natural gas (LNG) contracts that are already operating under these arrangements.
Prime Minister Rowley also noted that he and his team also took on in 2018 and 2019 of beginning the difficult re-negotiation of energy contracts across the whole value chain.
“I am pleased to report that as a direct result of these negotiations, the citizens of Trinidad and Tobago have been earning higher revenue for our gas from upstream, midstream and downstream due to the new formulae that were agreed to.”
He added, “Had these negotiations not been successful, given the lower production volumes, and the initial lopsided sharing of benefits then it is easy to calculate the dire consequences for the national revenue streams which we would have been experiencing at this time.”
While it has been the Prime Minister’s belief for some time now, that no contract is set in stone, and can therefore be renegotiated for the benefit of the people, his Guyanese counterparts hold a differing view.
Specifically, Vice President, Dr. Bharrat Jagdeo has refused to budge on renegotiating the Stabroek Block Production Sharing Agreement (PSA), despite describing it recently as a “sh**ty deal.”
The contract offers Guyana a paltry two percent royalty and a 50 percent take off profit oil after ExxonMobil and its partners would have recovered their share of expenses.
- Dr. Keith Rowley, Energy Conference, Liquefied natural gas, T&T’s Prime Minister, Trinidad and Tobago
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