Energy multinationals will choose Guyana over Trinidad & Tobago –Geophysicist

(Trinidad Guardian) New multi­na­tion­al cor­po­ra­tions will pre­fer to in­vest in Guyana rather than Trinidad & Tobago be­cause of poor reg­u­la­to­ry con­trols by the Min­istry of En­er­gy and lack of trans­paren­cy, says geo­physi­cist Javed Raza­ck.

Raza­ck, who is al­so di­rec­tor of con­tracts and pro­pos­als at Ramps Lo­gis­tics, was speak­ing at a post-bud­get sem­i­nar, host­ed by the Con­fed­er­a­tion of Re­gion­al Cham­bers held at the Cou­va Cham­ber of In­dus­try and Com­merce on Wednes­day.

Ex­press­ing dis­ap­point­ment that the 2019/2020 Bud­get did not of­fer any in­cen­tives for oil and gas op­er­a­tors or of­fer op­por­tu­ni­ties linked to the Guyanese oil find, Raza­ck said T&T will lose po­ten­tial in­vestors be­cause of this mas­sive de­vel­op­ment.

“When Guyana be­gins to pro­duce oil from Jan­u­ary 2020, the Guyanese gov­ern­ment share of prof­it in Guyana will be US$300 mil­lion. The cur­rent rev­enue for the year is about US$1 bil­lion which is a 30 per cent in­crease in rev­enue. Ex­xonMo­bil … have found 6 bil­lion bar­rels of re­cov­er­able oil so far and they have ex­plored about 20 per cent of the hy­dro­car­bons,” Raza­ck said.

He added, “Guyana is de­vel­op­ing in a huge way and when you look at Trinidad with poor in­cen­tives, lack of trans­paren­cy, lack of reg­u­la­tions, it is easy to see why a large multi­na­tion­al will go to Guyana or Suri­name to in­vest, rather than to in­vest in Trinidad.”

Raza­ck said in­vestors were bur­dened by dif­fi­cul­ties in do­ing busi­ness in T&T be­cause of the bu­reau­cra­cy at State in­sti­tu­tions.

“We need to re­design the con­trac­tu­al frame­work, the fis­cal regime as well as im­prove the ease of do­ing busi­ness with the reg­u­la­to­ry in­sti­tu­tions of the coun­try like the En­vi­ron­men­tal Man­age­ment Au­thor­i­ty, (EMA), Min­istry of Fi­nance and Min­istry of En­er­gy,” he added.

Raza­ck said he hoped that the gov­ern­ment will seg­ment T&T’s ma­ture field de­vel­op­ment and of­fer in­cen­tives for the small and medi­um op­er­a­tors

“You must look at the tech­ni­cal and eco­nom­ic as­pects to­geth­er and de­sign an eco­nom­ic frame­work that ac­tu­al­ly tar­gets each of the op­er­a­tors. The bud­get bare­ly has any­thing to in­cen­tivize the new drilling or ex­plo­rations. You have to break up the fields rather than look­ing at it as one en­er­gy sec­tor,” he added.

He not­ed that one as­pect of reg­u­la­tion that must be up­grad­ed in the pub­li­ca­tion of all ac­tiv­i­ties by multi­na­tion­al oil and gas play­ers, as well as small and medi­um en­er­gy op­er­a­tors.

“It is ex­treme­ly dif­fi­cult in T&T to find out what the big op­er­a­tors are do­ing. It is a big se­cret to find out who is do­ing what, who is do­ing what where and what are the de­vel­op­men­tal plans of these com­pa­nies. In Guyana, every day two or three sto­ries come out and op­er­a­tors are pub­lish­ing ex­act­ly what hap­pens. They keep the pub­lic in the loop. Com­pa­nies, there­fore, could see the op­por­tu­ni­ties com­ing up and they can po­si­tion them­selves to be a part of the sec­tor,” he added.

Asked why op­er­a­tors were not pub­lish­ing their ac­tiv­i­ties and keep­ing their busi­ness a se­cret, Raza­ck said, “Op­er­a­tors have be­come ac­cus­tomed to that and they don’t see it as a ne­ces­si­ty. It stems from a lack of in­ter­est from the gov­ern­ment and the com­pa­nies. It is sim­ple for a Min­is­ter to say please pub­lish the in­for­ma­tion, so the coun­try will know what is go­ing on. The se­cre­cy im­pacts the down­stream sec­tor who de­pend on the gas com­ing from up­stream,” Raza­ck added.

He fur­ther said that down­stream com­pa­nies will be able to plan if they know de­tails about oil and gas finds.