T&T is in economic recovery mode, Energy Minister Franklin Khan declared yesterday, citing a promising gas production forecast.
He said projections for 2018- 2022 range between 3.8 billion standard cubic feet and 4.2 billion standard cubic feet by 2022 and is a combination of first gas and discoveries.
“A significant part of the equation is the investment by upstream companies which successive governments have always welcomed,” he said when he spoke at the launch of the T&T Extractive Industries
Transparency Initiative (TTEITI) Steering Committee’s fifth T&T EITI Report at the4 Ministry of Energy in Port-of-Spain yesterday.
Noting that the energy sector is capital intensive, Khan said: “If you have to go into exploration—and the chance is one in 20, with a 20 to 7 success ratio—statistically you have to drill five wells before you make a discovery. If you only have money to drill one, then pack your bags and go.”
The minister added that the model for taxing extracting industries has to change.
While the National Gas Company pays $5.7 billion in taxes and EOG $1.3 billion, bpTT pays $480 million, he revealed.
According to Khan, it is not the fault of bpTT that they are paying less than their counterparts. However, the figures expose flaws in the tax system, which is based on profit only.
Khan reiterated that at a meeting with officials from Shell and BP during Prime Minister Dr Keith Rowley’s recent visit to London, a decision was taken for negotiating teams to be established on both sides.
“BP and Shell appointed their teams and we are in the process of finalising a schedule of meetings and engagements to meet a deadline of September, to come up with firm positions from both parties.
“The relations remain intact with Shell and BP. That is reflected in their high investment in Trinidad and Tobago,” he said.
“Shell has a re-development drilling programme for Starfish and Dolphin which were former British Gas fields that suffered formation damage when they were being drilled.
“Shell, as we speak, is drilling its second Starfish well.”