Some good fortune needed

In upstream production of oil, some modest gains in output are anticipated despite strong declines in mature fields. In 2017, a modest rise in production is expected as LGO’s GY-50 well in the onshore Goudron field will take place. The project came online in May 2016. The company is targeting an additional five wells. It should be noted that there are downside risks to investment if there are prolonged low oil prices which can hamper future production increases.

In upstream gas production the gas shortages experienced in 2016 will improve as new projects come online. First gas from new upstream projects should improve supply from late-2017. Technip was given a contract in 2014 to develop BP’s Juniper project which is situated off the southeast coast of Trinidad. The facility is estimated to have a processing capacity of 16.5mcm/d or around 6bcm per annum. First gas from the Juniper project is expected in late-2017 and it is anticipated that increased gas stabilisation and recovery in output should result from this date, although there are downside risks as output slips from other maturing fields. Should planned investment in exploration and production materialise, production is likely to recover over the medium term. In this regard work continues on new fields such as cross-border Loran-Manatee field shared with Venezuela in which first gas is likely around 2020.

Refining activity saw a recent upgrade which can see the production of more profitable fuels, however, the downstream sector remains under pressure in Trinidad and Tobago. While there are plans for a 430,000b/d export-oriented refinery, no final decision has been made on the project.

While this is but a few of the many moving parts that make up the energy sector, the idea is to identify the key issues that can affect the performance of the energy sector and ultimately affect the economy. Clearly there is optimism about a number of the projects in the energy sector. The return to growth and upbeat sentiment will take good negotiation skills, improvement in prices on the international market, proper revision of the tax regime affecting the energy sector, ability to attract investment and exploration and some luck. We will need some good fortune going forward.