“We trying to change the way in which our oil and gas fiscal regime works so that we would achieve two objectives- motivate investors companies to get involved in exploration and development while we maximise our return from the petroleum sector,” Imbert said.
“Our oil and gas fiscal regime has been with us for many years and comes in two types, we have the standard exploration production license where taxation is based on petroleum profits tax, supplementary profits tax oil levy and then there is the production sharing license where after the company has recovered its expenses, the production shared between the government and the company,” he said, adding there were approximately 27 different types of production licenses.
Imbert continued: “We in the Ministry of Finance and also working together with the Ministry of Energy we will be moving very swiftly in first quarter of 2017 to seek to finalise discussion with all the players towards a new oil and gas fiscal regime so you can do the exploration and bring fields into production.” Imbert was addressing the completion of the fabrication of the topside of the Juniper offshore platform at the TOFCO Yard, Labidco Industrial Estate, La Brea yesterday.
And noting that government was also “moving swiftly to finalise the gas supply contracts”, Imbert noted that the Juniper platform, which would be sited approximately 50 miles due East of Mayaro, was expected to begin production in August with a production of some 500 million standard cubic feet per day. The Juniper platform is expected increase local gas production by some 14 percent.
“This new production and other project that BP have in such as the Trinidad Onshore Compression Project is due to come on-stream I’m told in a couple months, in April 2017 will help us, in no small way to stabilise the current gas supply situation,”Imbert said.
“It won’t solve our problem but we have another project which I expect BP will reach agreement with the government soon, that the Angelin platform, together with Juniper and Angelin together and the other developments you have planned, such as the pipeline from the Dragon field in Venezuela which is progressing very well, I’m told and we expect to get gas from there I would say in a couple years, I understand there are no facilities onshore in Venezuela to receive gas from Dragon so as soon as Dragon comes on stream and the pipeline is constructed we should be able to access gas from Dragon,” he noted.
The Dragon field is was also expected to supply another 500 million standard cubic feet of gas per day.
He also noted that changes were also coming regarding the Supplementary Petroleum Tax and observed that while he was “very happy” that the price of oil was over US $50 per barrel, noted that some oil companies were “very unhappy” as their profit margin decreased at $50 per barrel.
“The way the SPT works is that it kicks in immediately at $50 so you have a situation where a company generally the smaller to medium sized company, can be profitable at $49 but as oil crosses $50 and goes into $52 and 53 and 55, the company has told us that they actually make less money between $50 and $60,” Imbert said, adding, “that means we now getting supplementary petroleum tax (SPT), which we don’t get when oil is less than $50.” “We are going to deal with that, we are going to address the way in which the SPT kicks in to make it a profit based tax rather than a volume or revenue based tax so that there would be a more equitable increase in the equity and this should encouraged some of our local companies to engage in greater production and in exploration,” he said.