The preliminary findings of a Government-initiated independent oil audit will be presented in September, said Energy Minister Conrad Enill. Enill was speaking at yesterday's consultation with stakeholders on the petroleum fiscal regime, which was held at the Crowne Plaza hotel, Wrightson Road, Port-of-Spain.
He said the Petroleum Fiscal Review Committee, which is chaired by Dr Ken Julien, has as its terms of reference to review:
�2 fiscal incentives for deep water
�2 incentives to small petroleum operators
�2 incentives for marginal or small fields, drilling incentives, enhanced oil recovery and heavy oil
�2 structure of the production sharing contract
�2 competitive bid process
�2 and, taxation regime for downstream projects
"In the country's current petroleum scenario, a number of land and shallow marine fields have reached or are reaching maturity. Sustaining and improving production levels from these existing fields is a major challenge," Enill said. "As we mark 100 years of commercial petroleum production, new frontiers, particularly in the deep waters, are expected to offer new opportunities in this country's development. "Therefore, providing the right fiscal incentives to achieve increasing exploration and development is crucial." Enill said the committee has received proposals from several energy organisations, including BHP Billiton, bpTT, British Gas, EOG Resources Trinidad Ltd, Petro-Canada, Petrotrin, Primera, Repsol YPF, the South Trinidad Chamber of Industry and Commerce, and Ten Degrees North.
The committee comprises the Ministry of Energy and Energy Industries, the Ministry of Finance, the Board of Inland Revenue, National Gas Company and the National Energy Corporation. Enill said it is important that T&T finds itself competitive in the petroleum industry and that unless it finds the right fiscal incentives, T&T would be the loser. "We hope to achieve a win-win package for the Government and contractor, one that is not only competitive, but also flexible in the context of the financial and economic environment and developments in the energy sector," Enill told stakeholders.
He said proposals presented to stakeholders yesterday were seeking to:
�2 reduce some of the risks to investors.
"In this regard, companies would be allowed to develop their own work programme. Further, the several upfront charges, as well as the levels of State participation, have been reviewed."
�2 encourage exploration and development activities in varying waters, namely shallow, average and deep
"Additionally, marginal and mature fields development will be promoted taking into consideration the cost and price environment."
�2 improve the terms and conditions of production sharing contracts, providing, among other things, a more equitable sharing of the economic rents
�2 broaden marketing opportunities for the Government to participate in the natural gas value chain.
Enill referred to another proposal that he said stakeholders "wouldn't like,"–to widen the Supplemental Petroleum Tax (SPT) to include both crude oil and natural gas." "The proposed mechanism would be sensitive to both price and production levels. And, finally, provide opportunities for Government to develop the country's heavy oil resources," Enill said.