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Saturday, February 22, 2025

An­a­lysts on PM Dr Kei­th Row­ley’s en­er­gy lega­cy:

Analysts on Dr Rowley’s energy legacy: Bold decisions, uncertain outcomes

by

Raphael John-Lall
27 days ago
20250126
Petrotrin refinery

Petrotrin refinery

Raphael John-Lall

Out­go­ing Prime Min­is­ter, Dr Kei­th Row­ley made some bold de­ci­sions in the en­er­gy sec­tor, the dri­ver of T&T’s econ­o­my, over the past nine years such as the moth­balling of the Pointe-a-Pierre re­fin­ery, the re­struc­tur­ing of At­lantic LNG com­pa­ny and sign­ing con­tro­ver­sial gas deals with Venezuela.

In look­ing at his lega­cy in the en­er­gy sec­tor, an­a­lysts have ques­tioned if these de­ci­sions would ben­e­fit T&T in the fu­ture as the coun­try is yet to see pos­i­tive re­sults of some of these de­ci­sions.

Jus­ti­fy­ing the de­ci­sion by ar­gu­ing that the com­pa­ny was mis­man­aged and a drain on the econ­o­my, the cur­rent ad­min­is­tra­tion closed the Petrotrin re­fin­ery in 2018 and opened whol­ly state-owned suc­ces­sor com­pa­nies, Trinidad Pe­tro­le­um Hold­ings Ltd and its sub­sidiaries Her­itage Pe­tro­le­um Com­pa­ny and Paria Fu­el Trad­ing Com­pa­ny, Guaracara Re­fin­ery Ltd and lega­cy Petrotrin.

In 2014, Petrotrin reg­is­tered a loss of $361.3 mil­lion and when Row­ley took of­fice in 2015 its loss was $1.2 bil­lion.

The Pointe-a-Pierre Re­fin­ery was closed in 2018 due to loss­es of more than $1 bil­lion in the pre­vi­ous five years. The clo­sure af­fect­ed 2,600 per­ma­nent jobs, in­clud­ing 1,700 di­rect jobs.

Speak­ing in the Sen­ate dur­ing the post-bud­get de­bate last Oc­to­ber, Min­is­ter of En­er­gy Stu­art Young said the re­fin­ery be­came fi­nan­cial­ly un­fea­si­ble and faced sig­nif­i­cant loss­es that threat­ened T&T’s eco­nom­ic ex­is­tence.

“It was ex­pe­ri­enc­ing sig­nif­i­cant loss­es be­cause it was an old­er re­fin­ery and be­cause we had to pur­chase the vast ma­jor­i­ty of crude. We had to be buy­ing over 100,000 bar­rels of oil a day. If you use a price of US$75 of oil, work the math, that had to be paid in US dol­lars, US$7.5 mil­lion a day, to put crude oil in­to an out­dat­ed re­fin­ery,” Young said.

For­mer en­er­gy min­is­ter and en­er­gy con­sul­tant Kevin Ram­nar­ine told the Sun­day Busi­ness Guardian that in the en­er­gy sec­tor, Row­ley made some im­por­tant de­ci­sions that will con­tin­ue to im­pact the coun­try well in­to the fu­ture. How­ev­er the sec­tor is worse off to­day than ten years ago.

Ram­nar­ine was the last min­is­ter of en­er­gy be­fore the Row­ley ad­min­is­tra­tion took over in 2015.

“Some of the ma­jor is­sues in the en­er­gy sec­tor over the past decade in­clude the sig­nif­i­cant de­cline in nat­ur­al gas pro­duc­tion, the clo­sure of the re­fin­ery at Pointe-a-Pierre, At­lantic Train 1 and oth­er plants at the Point Lisas Es­tate, the deals with Venezuela es­pe­cial­ly Drag­on Gas agree­ment, the de­clines in en­er­gy sec­tor re­al GDP and de­clines in per­sons with jobs in the en­er­gy sec­tor, both of which were sig­nif­i­cant, los­ing our po­si­tion as pro­duc­tion leader of the Cari­com to Guyana.”

Ram­nar­ine gave the opin­ion that the Gov­ern­ment did lit­tle to pro­vide in­cen­tives to com­pa­nies to drill for en­er­gy re­sources.

“The Gov­ern­ment in my opin­ion failed to ad­e­quate­ly in­cen­tivise drilling and we went through a pe­ri­od be­tween my de­par­ture from of­fice in 2015 and the ar­rival of Min­is­ter Young in 2021 of lit­tle or no new acreage awards and dis­ap­point­ing bid-round re­sults. This has re­al­ly set us back bad­ly. My biggest dis­ap­point­ment is the Gov­ern­ment did not grab the deep­wa­ter ba­ton I left in 2015 and run with it as they ought to have done. We should be pro­duc­ing deep­wa­ter gas to­day but in­stead we are look­ing at 2031 or 2032.”

He ar­gued that the en­er­gy sec­tor un­der the Row­ley ad­min­is­tra­tion “de­clined bad­ly” over the past decade.

“My opin­ion and this is in­dus­try con­sen­sus, is the en­er­gy sec­tor has de­clined bad­ly un­der Dr Row­ley. That opin­ion is sup­port­ed by the sta­tis­ti­cal facts and re­al­i­ty. The de­cline will not stop un­less we get Venezue­lan gas and deep­wa­ter gas. One won’t be enough. We need both.”

Ram­nar­ine al­so shared sta­tis­tics from the Min­istry of En­er­gy which show that in 2015 oil pro­duc­tion was 78,630 bar­rels a day while in 2024 oil pro­duc­tion had fall­en to ap­prox­i­mate­ly 51,000 bar­rels per day.

Nat­ur­al gas pro­duc­tion was 3.8 bcf a day in 2015 while in 2024 it had fall­en to 2.525 bcf/d.

He ex­plained why there was a fall in pro­duc­tion since 2015.

“The is­sue is a re­duc­tion in drilling by ap­prox­i­mate­ly 60 per cent. The fis­cal regime is one fac­tor, and the oth­er fac­tor is the ease of do­ing busi­ness. For oil, the sup­ple­men­tal pe­tro­le­um tax (SPT) is a ma­jor ob­sta­cle. If we abol­ish SPT on land we could re­vive land-based oil pro­duc­tion.”

While he spoke pos­i­tive­ly of Row­ley’s de­ci­sion to work with neigh­bour­ing Venezuela to ex­plore gas fields, he said there con­tin­ue to be risks as­so­ci­at­ed with this co-op­er­a­tion.

“I want to add that I think the pol­i­cy to pur­sue part­ner­ship with Venezuela to ac­cess their vast nat­ur­al gas de­posits is the right one. How­ev­er the pol­i­tics in Venezuela and the geopol­i­tics were ob­sta­cles but things can al­ways change.”

Guyana vs T&T

Guyana trails be­hind on­ly the US and Brazil as the fastest grow­ing oil pro­duc­ers not part of the Or­ga­ni­za­tion of Pe­tro­le­um Ex­port­ing Coun­tries (OPEC).

A 2024 re­port from the US En­er­gy In­for­ma­tion Ad­min­is­tra­tion (EIA) said the rank­ing was made be­cause Guyana bumped up its oil pro­duc­tion by an an­nu­al av­er­age of 98,000 bar­rels per day (b/d) in the pe­ri­od 2020-2023.

Be­cause of Guyana’s as­cen­dan­cy as a glob­al oil pro­duc­er with the fastest grow­ing econ­o­my in Latin Amer­i­ca and the Caribbean, an­a­lysts com­pare T&T to Guyana.

Econ­o­mist Dr Vanus James weighed in on the dis­cus­sion, say­ing Guyana’s emer­gence as the re­gion­al oil pow­er and T&T’s rel­a­tive de­cline should not be sole­ly blamed on the Row­ley’s lega­cy.

“Well, that is not be­cause of the fail­ures of the Gov­ern­ment of T&T, sig­nif­i­cant as those are. That is the re­sult of the dis­tri­b­u­tion of the gifts of na­ture and the his­tor­i­cal machi­na­tions of the British colo­nial em­pire. The pre­oc­cu­pa­tion with re­liance on nat­ur­al re­sources or colo­nial in­her­i­tance is not one that is en­cour­aged by sound eco­nom­ic analy­sis of the de­vel­op­ment process, as Guyana will al­so dis­cov­er soon­er or lat­er.”

James al­so said that Row­ley’s han­dling of the en­er­gy sec­tor has caused the en­tire econ­o­my to suf­fer.

“Look care­ful­ly at the fun­da­men­tals. Row­ley took over an econ­o­my from Kam­la Per­sad-Bisses­sar that was in deep cri­sis be­cause of its ex­ces­sive de­pen­dence on oil and gas. He leaves be­hind an econ­o­my that is still ex­ces­sive­ly de­pen­dent on oil and gas, and is still in sig­nif­i­cant cri­sis or head­ing there.

“Row­ley took over a gov­ern­ment that was in­ca­pable of lead­ing fun­da­men­tal change in any area of eco­nom­ic or so­cial life, in­clud­ing crime man­age­ment, and in­ca­pable of em­pow­er­ing its cit­i­zens and com­mu­ni­ties be­cause of its au­thor­i­tar­i­an and over-cen­tralised de­sign. In oth­er words, he took over a gov­ern­ment in des­per­ate need of con­sti­tu­tion­al re­form. He leaves be­hind a gov­ern­ment that has the same de­fi­cien­cies and is still in des­per­ate need of con­sti­tu­tion­al re­form. It should be ob­vi­ous to an or­di­nary cit­i­zen that this is a lega­cy of fun­da­men­tal fail­ures.”


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