Can Trinidad and Tobago escape from the oil trap?

For decades, Trinidad and Tobago relied on oil production to achieve revenues to the small Caribbean state. However, with the start of their oil reserves, expectations are less confident, despite the continuous investment in new auctions for further exploration. The country is now at a crossroads, where the government decides whether to support the most engraved exploration practices or switch to alternative energy sources and follow up on economic diversification.

In recent years, the Guyana state in the neighboring South America has attracted attention from oil specialties all over the world that is looking to invest in exploration and production activities in the new oil area, where its extensive reserves are largely not exploited. This also drew attention to Trinidad and Tobago, where oil companies hope that similar reserves will be found through the most tweeting exploration activities.

Treenidad and Tobago for a long time The largest oil and natural gas producer in the Caribbean Sea region It is the 17 largest natural gas products around the world. The small Caribbean country is home to one of the western hemisphere The largest natural gas processing facilities – Limited Phoenix Park, with a treatment capacity of about 2 billion cubic feet per day (BCF/D). It is expected that the oil and gas market in Trinidad and Tobago will expect It grows at an annual growth rate of 4.4 percent Between 2020 and 2030, according to Mordor Intelligence, with the continuation of giant oil companies such as BP, Repsol and Shell at work in the country.

However, in the wake of the introduction of sanctions on Venezuela, the giant of oil adjacent to the United States, the oil industry in Trinidad and Tobago suffered. In April, the US government asset office decided to monitor foreign assets to cancel two private licenses for dragon gas fields and a marine border between Venezuela, Treenidad and Tobago, with Trump clarifying plans to restrict Venezuelan oil production.

In September, the Treenadad and Tobago auction did not attract blocs and production of gas in Trinidad and Tobago many foreign investors, which witnessed the provision of bids provided. Only four of 26 areas are offered. The Chinese CNOC display in three areas, while the micro -consortium of the smaller energy companies is on another block. With a few power players in the deep waters in the region, the government was encouraging producers to increase natural gas production to allow them to increase their ability to treat gas and exports.

Trinidad and Tobago have a separate agreement with American of Exxon Mobil Explore an area equivalent to seven water blocksWhich is expected to bring up to 21.7 billion dollars to the country if the reserves are found. This is Exxon’s return to the country after a 20 -year hiatus, after Trinidad and Tobago left in 2003 after an unsuccessful exploring. Exxon has made successful exploration and production in the Stabroek bloc in Guena in recent years, which seems to have made Trinidad Trinidad and Tobago. Guyana has become the fifth largest oil exporter in Latin America in less than a decade, as production grows from 400,000 barrels per day to more than 660,000 barrels per day in just a few months.

Nowadays, Trinidad and Tobago have no production of deep water space. However, BP and Shell have recently completed seismic works in three Deepwateer blocks in the region, Woodside Energy said it is studying the development of Calypso gas discovery.

The oil production in Trinidad and Tobago decreased to less than 54,000 barrels per day, from more 278,000 barrels of crude oil At its peak in the seventies. that it Only the oil refinery is closed In 2018, due to years Mismanagement A significant decrease in production by state -owned Petrotrin. accident a report It indicates that the country’s energy revenues decreased by 48.4 percent to 14.7 billion dollars in the past fiscal year, as their non -energy revenues increased by 26 percent to 32.7 billion dollars, indicating an increase in economic diversification.

Treenad and Tobago created her Heritage and Installation Fund In 2007, it aims to enhance economic diversification using its oil wealth to ensure long -term economic security. However, the significant decrease in oil revenues in recent years has made the Fund a much less successful oil funds, such as Norway funds and the United Arab Emirates. In 2022, the government launched a Green hydrogen strategyIt aims to diversify and add value to the country’s energy sector; However, this is in the emerging stage of development.

It is not certain what Trinidad and Tobago will do to ensure the future of its economic stability, while also looking at the feasibility of developing new uninterrupted oil. 2019 report submitted by an American consultant who is estimated 10 years of gas reserves Leave. Although the new investment in deep water exploration can enhance this number, there are no guarantees, and the environmental effects are great. However, it is only the largest economic diversification that will reduce the pressure on the government to continue digging, which is difficult to achieve without oil revenues needed to finance emerging industries.

Written by Veliciti Pradstock for OilPrice.com

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