Interview: Claire Fitzpatrick
What is the mid-term outlook for T&T’s upstream and downstream sectors following the closure of the Petrotrin refinery?
CLAIRE FITZPATRICK: The restructuring of any state-owned entity is not an easy decision to make, and I recognise that it was very challenging. It was an action aimed at creating organisations that can compete and be profitable for the country. What we have learned from other parts of the world where BP operates is that there are challenges that come with operating older assets and ageing infrastructure. When maintenance falls behind, it can require considerable resources to catch up.
The subsurface allegedly has more oil and gas in the Gulf of Paria; therefore, it is a practical move to build production back up. From a broader perspective, the more that T&T can produce and export, the greater the source of foreign exchange. Efforts aimed at increasing exploration and production activities also have significant potential.
How would you evaluate the adoption of renewable energy in Trinidad and Tobago, and what opportunities does it present?
FITZPATRICK: The government released a request for proposals for renewable projects in order to meet its target of renewable sources accounting for 10% of the energy mix by 2021, which is a milestone on the trajectory towards T&T’s Paris Agreement commitments. It is a good sign that there were so many expressions of interest. This is excellent news for the country, showing that there is interest and competition in renewable energies.
The government has spoken very strongly about the need for energy efficiency, which aligns with the dual challenge as BP understands it: half the world needs more energy as economies transition from low-income to middle-income status, while the other half is seeking cleaner energy sources. T&T’s situation is somewhat nuanced in that it already has more power capacity than it currently needs but it also has commitments under the Paris Agreement, which is adding more energy from renewables.
Moreover, Trinidad is among the world’s most energy inefficient countries, using more energy per capita than most countries.
There is significant economic opportunity here. If the country can improve energy efficiency and add renewable sources of energy, then gas that is currently being used to generate power can be exported instead, whether that is through liquefied natural gas or petrochemicals. This would generate a return for the country and help to offset the economic challenge that exists from the take-or-pay contracts for power generation. Of course, renewable energy will improve the nation’s outcomes from a climate change standpoint.
To what extent has the Venezuela crisis stymied energy hydrocarbons development in T&T, and how can further activity be facilitated?
FITZPATRICK: First, we would like to see a solution for Venezuela on a humanitarian level. In terms of cross-border developments, it is challenging given the current sanctions on Venezuela that have affected work to be carried out by multinationals. Once there is stability, the sanctions will be dissipated and internationally recognised government agencies can set to work.
Companies in the energy industry work within the available legal frameworks. The government-to-government relationships and agreements will facilitate the development of these resources.
Given the existing natural gas market in Trinidad, the fastest and most economic way to develop these gas resources would be to monetise through Trinidad. The way I see it, the question is when this process will happen, rather than if it will happen.
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