Cur­tis Williams

Lead Ed­i­tor Busi­ness

cur­tis.williams@guardian.co.tt

In what must be a ma­jor dis­ap­point­ment for the Gov­ern­ment and a sure blow to the coun­try’s eco­nom­ic prospects, bpTT has told the Dr Kei­th Row­ley ad­min­is­tra­tion that go­ing for­ward it should ex­pect much low­er than fore­cast­ed nat­ur­al gas pro­duc­tion, with the short­fall be­ing as high as 15 per cent this year and over ten per cent un­til 2024.

In a con­fi­den­tial se­ries of doc­u­ments which Guardian Me­dia has ob­tained, bpTT al­so told the ad­min­is­tra­tion that it has sus­tained sig­nif­i­cant loss­es over the last five years, in­clud­ing a whop­ping $2.825 bil­lion be­fore tax last year.

The doc­u­ments show that even with the an­nounced projects like Mat­a­pal and Cas­sia C, while they will in­crease pro­duc­tion by about 140 mil­lion stan­dard cu­bic feet per day (mm­scf/d) of gas, this will still fall short by an av­er­age of over 200 mm­scf/d.

To put it in­to con­text, that is enough gas to run two methanol plants and more than 60 per cent of all the gas the coun­try needs for elec­tric­i­ty gen­er­a­tion.

The news could not come at a worst time for the Row­ley ad­min­is­tra­tion, al­ready faced with the em­bar­rass­ment of hav­ing spent quar­ter of a bil­lion dol­lars in a des­per­ate at­tempt to save At­lantic LNG’s Train 1 that is now like­ly to be moth­balled. Sources said yes­ter­day that En­er­gy Min­is­ter Stu­art Young will soon make an an­nounce­ment on Train 1.

Guardian Me­dia has been told the Min­is­ter last week asked the share­hold­ers to give him time to take the mat­ter to the Cab­i­net and put in place a pub­lic re­la­tions plan around the an­nounce­ment, which will in­clude the soon to be re­leased im­proved fi­nan­cial per­for­mance of the NGC.

It al­so comes at a time when S&P Mar­ket In­tel­li­gence has down­grad­ed the coun­try’s eco­nom­ic out­look.

S&P Mar­ket In­tel­li­gence said, “The neg­a­tive out­look re­flects our view that there is at least a one-in-three chance we could low­er the rat­ings over the next 12-to-24 months. We ex­pect the de­cline in en­er­gy pro­duc­tion to re­verse over the next two years, and the econ­o­my to re­turn to growth by next year. This uptick should sig­nif­i­cant­ly re­duce the gov­ern­ment’s fis­cal deficit and even­tu­al­ly sta­bilise its net debt-to-GDP fig­ures. How­ev­er, it re­mains un­cer­tain whether this im­prove­ment will be suf­fi­cient to bring per capi­ta in­come back to­ward ear­li­er lev­els, fol­low­ing five years of neg­a­tive re­al GDP per capi­ta growth, on a sus­tained ba­sis.”

The re­lease said while Trinidad and To­ba­go’s ex­pect­ed fis­cal con­sol­i­da­tion and its size­able gov­ern­ment as­sets will con­tin­ue to sup­port the in­vest­ment-grade rat­ing, S&P still ex­pects “the im­pact of the COVID-19 pan­dem­ic, to­geth­er with the do­mes­tic en­er­gy sec­tor down­turn that be­gan be­fore, but was ex­ac­er­bat­ed by the pan­dem­ic, will re­sult in per capi­ta in­come that is 19% low­er this year than it was a decade ago.”

As such S&P said, “We are re­vis­ing our out­look on Trinidad and To­ba­go to neg­a­tive from sta­ble and af­firm­ing our rat­ings, in­clud­ing our ‘BBB-’ long-term sov­er­eign cred­it rat­ing, on the coun­try.”

The fol­low­ing ques­tions were sent to bpTT on the is­sue:

Can bpTT say whether it has re­vised its es­ti­mates of nat­ur­al gas pro­duc­tion down­wards be­tween now and 2030?

 Can bpTT say what has oc­ca­sioned the low­er pro­ject­ed vol­umes?

 Can bpTT say if it is un­like­ly to re­turn to the 2bcf/d be­fore the mid­dle of the decade?

 What does this re­duced out­look mean for LNG sup­plies to T&T?

 Is the lim­it­ing fac­tor dis­cov­er­ies or in­vest­ment?

How­ev­er, bpTT’s re­sponse was guard­ed.

“We do not com­ment on long-term fore­casts be­cause they in­clude as­sump­tions on ex­plo­ration and ap­praisal ac­tiv­i­ty, un­sanc­tioned projects and vol­umes from de­vel­op­ments op­er­at­ed by oth­ers. These all car­ry a de­gree of un­cer­tain­ty and are sub­ject to change. Our goal re­mains to ef­fi­cient­ly find and de­vel­op re­sources to sat­is­fy our con­trac­tu­al oblig­a­tions,” the en­er­gy gi­ant said.

The bpTT fore­cast, which con­tin­ues un­til the end of the decade, shows the com­pa­ny will not re­turn to pro­duc­ing the two bil­lion cu­bic feet of nat­ur­al gas, thought by in­dus­try in­sid­ers as the linch­pin to the coun­try’s abil­i­ty to meet all its gas re­quire­ments, and un­less there are new play­ers with large amounts of nat­ur­al gas or the coun­try has ac­cess to Venezue­lan gas, the out­look for LNG and petro­chem­i­cals re­mains chal­leng­ing.

For the Gov­ern­ment, it means loss of op­por­tu­ni­ty to make mon­ey on oth­er ma­jor fronts, less tax­es on pro­duc­tion at the well­head and less net­back prices on ei­ther LNG or petro­chem­i­cals if the coun­try con­tin­ues to have nat­ur­al gas short­ages.

bpTT has for decades been the largest sin­gle pri­vate-sec­tor con­trib­u­tor to gov­ern­ment rev­enue and for­eign ex­change earn­ings.

In many ways, the T&T econ­o­my has fol­lowed the suc­cess or fail­ure of the com­pa­ny, from its days as Amo­co with its huge oil dis­cov­er­ies off the coast of Ma­yaro, to the gi­ant nat­ur­al gas fields like Cas­sia and Red Man­go.

It was based on those nat­ur­al gas dis­cov­er­ies that the com­pa­ny was able to sup­ply all the gas for the LNG Train 1, that of 500 mm­scf/d.

Those days ap­pear now gone and like­ly with it, any hope of the days of full LNG and petro­chem­i­cal pro­duc­tion.