Williams: TT to earn billions more in tax revenue from offshore field

Energy Minister Eric Williams yesterday said that Trinidad and Tobago stands to earn billions of dollars in additional tax revenue over the life span of the development plans for the Greater Angostura field. He was at the time speaking at BHP Billiton’s offices on the occasion of BHP’s award of a contract to build the Kariri-1 (K-1) deck for the platform at the Angostura Field Development. He said while the development plans for the Greater Angostura field call for capital expenditures that are budgeted to be around US $700 million, this country can earn billions of dollars as a result of the oil and gas discoveries off the east coast in the Greater Angostura field made by Bhp Billiton and its partners. Williams said one of the key challenges facing the Government was the equitable distribution of TT’s wealth to the benefit of the widest cross-section of its citizens. “In our view this must be done without the creation of uncontrolled inflation within the economic system and in a manner that will redound to the sustainable development of the country and its people.”

In this context, he said Government views the creation of local expertise in the energy sector which is transferable to other sectors of the economy, as critical to building local human resource capacity. In addition, he noted that Government will institute measures to ensure that a significant portion of capital expenditure for investment in the energy sector is channelled into the local economy. Williams also noted that the energy sector accounts for almost one quarter of the Gross Domestic Product (GDP) of TT, that is $9.7 billion of a total $42.6 billion between 1996 to 2001. “In comparing our GDP to our Gross National Product (GNP), there is a large and growing gap between the two, currently in the order of $2 billion.” He said this represents one of the key macro-economic challenges facing the Government. He added that one key strategy to narrow this gap is to ensure that as much of the capital expenditure “spent” on these types of projects physically takes place here in TT.

Williams added that as Government presses on with the implementation of strategies to ensure achievement of developed nation status for the country, they must continually measure their progress as they go along. “Today, our country is currently ranked in the middle-income strata with a GNP per capita of $7,262.” He said in order to close this gap, the Government has identified several strategies as a means of achieving this goal. Amongst these are increasing the productive capacity of local business for both domestic and export markets as well as increasing local enterprises’ share in projects with heavy capital inflows from foreign direct investment.