In the wake of BPTT’s announcement on Friday of the poor results of its drilling projects for natural gas, Finance Minister Colm Imbert faces a new challenge mere days before his 2019 mid-term Budget review.
Mr Imbert, who had publicly placed his hope for economic expansion on rising gas production, now faces the spectre of not only this country failing to meet its production targets but a decline in the present rates of extraction.
BPTT has effectively signalled that come next year and to 2021 it will not have enough gas to supply Atlantic LNG’s Train One and as a result, the plant may have to be shut down for this period.
This, coming on the heels of Sandals International’s pull out from Tobago and the stalled Dragon gas deal due to Venezuela’s socio-political crisis, could have a major trickle-down effect on not only the downstream sector but Government tax revenue, since BPTT is currently the country’s major gas supplier and largest single taxpayer.
With T&T already reeling from years of natural gas curtailment and the hope that it was coming to an end now dashed, there is no upstream company in a position to immediately step up to fill the gap left by BPTT.
With crude oil at historically low levels, State-owned Heritage Petroleum now finding its feet and the NGC already under financial constraints, what is to come of Mr Imbert's short to medium-term plan for the country?
So having dressed down the Opposition and other challengers to his Government’s economic plans in recent times, what will Mr Imbert do now? Last week he spent considerable time using revised statistics on economic growth from the International Monetary Fund as a precursor to what he was no doubt to announce tomorrow.
But with BPTT’s announcement delivering a major blow to the country’s economic recovery, he will have to temper his plans unless he has some major surprise in the making.
To increase spending he will have to borrow or sell state assets, as with the potential loss of hundreds of millions of dollars there is at least going to be an increase in the debt to GDP ratio and depending on how it is managed higher levels of budgetary deficits.
So the question is will Minister Imbert do so, or with the prospect of major elections around the corner and being mindful of the need to keep his Government’s stock high, will he go full throttle with the plans he had before Friday’s BPTT shocker?
Either way, Minister Imbert must take into account all the factors and make the decision in the best interest of the country and not on what is needed to win elections.