Before the Applause Fades: What Guyana Must Learn from Trinidad and Tobago’s Oil & Gas Trajectory

Mar 01, 2026 Features / Columnists, News

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By Anthony Paul, Senior Energy and Strategy Advisor and former Director of Geology and Geophysics at the Trinidad and Tobago Ministry of Energy

(Kaieteur News) – Every rising petroleum state believes it is different – until it begins to repeat the same institutional mistakes.

Trinidad and Tobago once stood where Guyana stands now: confident, cash-rich, strategically positioned, and widely praised for transforming offshore discoveries into industrial growth. Petrochemical complexes expanded, LNG exports flourished, and the country became a regional energy anchor. Yet over time, beneath the headline successes, regulatory strain, licensing inconsistencies, institutional under-resourcing and opaque contractual practices began to accumulate. The consequences were not immediate. They were incremental. And that is precisely why they matter.

Guyana today is building not only pipelines and power plants, but the institutional architecture that will govern them for decades. Its decision to publish petroleum licences has already set it apart as a transparency leader. But as gas-to-energy infrastructure advances, and as midstream and downstream complexities deepen, the question is no longer whether Guyana will succeed in monetising its hydrocarbons. The question is whether it will embed the safeguards that prevent gradual institutional drift.

History offers no guarantees. But it does offer warnings.

Guyana has, in recent years, distinguished itself in one important and commendable way: it has made petroleum licences public. The Production Sharing Agreement for the Stabroek Block involving ExxonMobil and its partners is publicly available. Environmental permits for major projects have been placed in the public domain. The new petroleum legislation is accessible for scrutiny.

This is not a small thing.

In a sector historically clouded in confidentiality across many jurisdictions, Guyana has signaled that petroleum governance must be visible to its citizens. That approach has strengthened public trust, enabled informed debate, and given civil society and technocrats the ability to assess the stewardship of national resources.

Now, as the country advances its gas infrastructure ambitions – particularly the gas-to-energy project and associated pipeline – that same commitment to transparency is being tested.

And as Guyana thinks about the future, it must look not only at global models, but very carefully at regional neighbour, Trinidad and Tobago.

Because the lessons of its rise are important.

But the lessons of its decline are indispensable.

The most important lessons from Trinidad and Tobago’s energy journey are found in the subtle governance gaps that followed it.

Production vs Transportation – And the Question of Cost

Under the Petroleum Activities Act 2023, once a commercial discovery is declared, a production licence is required before petroleum can be produced. That is well understood.

Less widely discussed, but equally significant, is that the Act contemplates separate authorisation for transportation infrastructure, including pipelines, where those facilities are not already incorporated into an approved development plan.

This distinction matters because midstream infrastructure often carries long-term financial commitments.

A report by Reuters referenced a US$55 million per year payment structure for the pipeline component of the gas-to-energy project – totalling approximately US$1.1 billion over twenty years. At the same time, ministerial statements have suggested that Guyana will not pay until gas begins to flow.

Those are materially different interpretations of fiscal exposure.

If there is a take-or-pay structure, that allocates risk one way. Above and beyond paying for the pipeline via cost recovery, Guyana might have been paying for its availability since its completion.

If payments are strictly tied to gas delivery, risk is allocated differently and Guyana could not be paying.

The simplest solution is disclosure.

Publishing the relevant transportation licence, development approvals and associated agreements – just as production licences have been published – would allow the public, Parliament, technocrats and investors to see the exact payment triggers and contractual mechanics.

Transparency quiets controversy. Opacity sustains it.

But transparency is not only about this pipeline.

It is about institutional design, and about avoiding mistakes others have made.

The Trinidad & Tobago Experience: Rise and Warning

Trinidad and Tobago once stood as the Caribbean’s energy success story.

It leveraged gas discoveries into LNG exports, ammonia and methanol industries, and decades of industrialisation. It demonstrated how a small state could monetise hydrocarbons strategically.

Yet over time, warning signs emerged.

Declining production is one factor, but institutional drift is another.

If Guyana is to avoid similar outcomes, it must build safeguards now – not later. Five lessons deserve careful attention.

1. The Regulator Must Be Strong – And Remain Strong

One recurring concern raised in discussions about Trinidad and Tobago’s later years has been the weakening or under-resourcing of regulatory institutions.

Complex hydrocarbon economies require up-to-date industry technology, systems and procedures, regulatory instruments, specialised skills and experience across a range of disciplines, and retention strategies to grow and maintain the required capability.

As petrochemical chains deepen and vertically integrated gas structures evolve, regulatory oversight becomes more complex – not less.

Guyana has created a new petroleum governance framework. That is a significant step.

But a legitimate policy question must be asked:

Has Guyana fully resourced and empowered its regulator to handle what is coming next?

Gas-to-energy is not the end. It is the beginning of midstream and downstream complexity. Institutional capacity must expand in advance of that complexity.

Otherwise, oversight lags behind industry evolution.

And once regulatory gaps appear, they are difficult to close.

2. Consistency, Transparency and Accountability in Licensing

Over time in Trinidad and Tobago, observers have pointed to concerns about inconsistency in licensing and contracting decisions. Shifting fiscal terms. Negotiated arrangements lacking clear precedent. Adjustments not always grounded in publicly articulated policy.

In any hydrocarbon state, licensing decisions form the backbone of resource governance.

Inconsistent, opaque or even absent licensing does not merely create political controversy. It creates:

• Investor uncertainty
• Public mistrust
• Uneven fiscal outcomes

Guyana’s publication of upstream licences has helped create predictability.

But as midstream and downstream licensing expands – pipelines, storage facilities, gas processing plants, petrochemicals – that consistency must continue.

Publishing licences creates institutional memory. It anchors precedent. It allows future policymakers to see the trajectory of decisions.

Without transparency, policy becomes episodic.

3. Licensing of Petrochemical and Gas-Based Operations

Trinidad and Tobago’s industrial build-out included major ammonia and methanol plants. Over time, questions emerged about whether certain statutory licensing provisions were fully operationalised in downstream and petrochemical activities.

When statutes require licensing but implementation is partial or informal, regulatory gaps arise.

Guyana’s Petroleum Activities Act contemplates licensing for transportation, storage and processing where not integrated into upstream approvals.

As Guyana moves toward industrialisation – fertilisers, petrochemicals, NGL extraction, gas processing – licensing clarity must be maintained.

Every major petroleum-linked operation should have:

• Clear statutory authority
• Defined licensing conditions
• Published approvals
• Transparent fiscal arrangements

If licensing is informal, opaque or politically discretionary, distortions accumulate.

And distortions compound over time.

4. The Petroleum Register: Transparency in Practice

Modern petroleum legislation often requires a Petroleum Register – a public record of licences, transfers, assignments, amendments and encumbrances.

Such registers are not administrative trivia. They are transparency instruments.

If assignments occur without clear public record, beneficial ownership and interest transfers become opaque.
If amendments are not publicly recorded, fiscal terms can shift without public awareness.

A functioning, regularly updated Petroleum Register is not bureaucratic paperwork. It is a public ledger of national resource stewardship – one of the simplest and most powerful tools of transparency available under petroleum legislation.

Guyana has the opportunity to ensure that this tool is not merely a statutory clause, but a living instrument of accountability.

5. Transfer Pricing: The Silent Drain

Perhaps the most sobering lesson concerns transfer pricing.

In vertically integrated gas economies, gas is often sold between related corporate entities – from upstream producers to mid and downstream trading, power or petrochemical affiliates.

Where transfer prices are not rigorously benchmarked and audited, enormous value can shift across corporate structures.

Government sponsored studies and public discourse in Trinidad and Tobago over the past two decades has referenced potential value leakage through transfer pricing mechanisms in the order of tens of billions of US dollars since the start of the century.

Whether precise figures are debated is less important than the structural lesson:

Where gas is sold between related parties, and where petrochemical operations are vertically integrated and value-shifting across multinational global portfolios is not adequately monitored, transfer pricing becomes a central fiscal risk.

Without clear licence provisions, strong audit capacity, independent verification and arm’s-length pricing benchmarks, value can migrate quietly out of the fiscal net.

As Guyana contemplates deeper gas monetisation, potentially including petrochemicals or LNG in the future, transfer pricing oversight must be built into contracts, regulations and institutional capacity from the start.

Learning from Rise — and from Decline

It is natural to study Trinidad and Tobago’s early success. Its rise offers inspiration:

• It monetised gas efficiently.
• It built industrial clusters.
• It developed technical capacity.

Those are lessons worth studying.

But it is equally important to study what happens when:

• Regulatory capacity stagnates
• Licensing becomes inconsistent
• Transparency tools are underutilised
• Pricing oversight weakens

Resource states do not decline overnight.
They erode incrementally.

Guyana is at a formative stage. The advantage of being late to development is the ability to learn from others.

The frameworks built now will determine whether its petroleum era produces sustained prosperity or future structural strain.

Building Safeguards into Guyana’s Framework

Transparency in pipeline licensing is not an isolated issue. It is part of a broader institutional culture.

Publishing upstream licences was a strong start.

Publishing midstream and downstream licences, including those related to the gas-to-energy pipeline, would signal continuity in that culture.

At the same time, Guyana should:

• Fully resource and insulate its regulator.
• Ensure licensing decisions are consistent and publicly documented.
• Operationalise and maintain a transparent Petroleum Register.
• Build transfer pricing audit capacity early.
• Embed industrial licensing within clear statutory frameworks.

The lessons of Trinidad and Tobago’s rise should inspire ambition.

The lessons of its decline should instil caution.

Guyana has the rare advantage of hindsight. It can design its legal, regulatory, contracting and institutional frameworks with regional experience already available as evidence.

Transparency is not a threat to development.
It is the architecture of durable development.

If Guyana continues and deepens its commitment to publishing licences and strengthening institutions, it will not merely extract hydrocarbons.

It will govern them well.

A Maturing Petroleum State Must Think Long-Term

Guyana is no longer simply an offshore oil producer. It is becoming an integrated petroleum economy.

That transformation brings opportunity – but also structural risk.

The question is not whether Guyana will develop gas-based industries.

It is whether it will do so with institutional strength equal to the scale of the ambition.

Transparency, regulatory capacity and disciplined licensing are not obstacles to development. They are the foundation of sustainable development.

As Guyana continues its admirable practice of publishing petroleum licences, it should extend that openness to midstream and downstream authorisations, including those related to the gas-to-energy pipeline.

And as we celebrate its rapid rise, we must also quietly study the trajectory of its closest hydrocarbon neighbour.

The lessons of Trinidad and Tobago’s success are worth emulating.

The lessons of its decline are worth preventing.

If Guyana builds those lessons into its framework today, it will not merely become an oil producer.

It will become a petroleum state that endures.

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• Guyana Oil, oil & gas, T&T oil, trajectory

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