The oil and gas industry has long been the driver of Trinidad and Tobago’s economy. In 2017 the petroleum sector accounted for 33.7% of GDP, according to the “Review of the Economy 2017” report by the Ministry of Finance. T&T plays an important role as a gas supplier for the Latin American and the Caribbean market, given that Peru is the only other exporter of liquefied natural gas (LNG) in the region.

While both countries hold the region’s only LNG facilities, T&T’s liquefaction capacity is almost double that of Peru’s, producing over 17.7m standard cu feet per day (scfd). The natural gas processing complex in Savonetta, on T&T’s west coast, is one of the largest of its kind in the Americas. Operated by local energy company Phoenix Park Gas Processors, it supplies gas as feedstock to power plants and petrochemicals facilities across the country.

While natural gas remains the sole source of T&T’s power generation, the country has plans to introduce renewable energy to the mix. A decline in international hydrocarbons prices in recent years has demonstrated the vulnerability of an economy heavily dependent on oil, highlighting T&T’s need to pursue more reliable sources of energy.

Oil & Gas

The country is the largest oil and gas producer in the Caribbean, when taking into account both offshore and onshore assets, and is a key exporter of LNG, ammonia and methanol. According to the “Budget Statement 2018” by the Ministry of Finance, however, gas production has been declining since 2015, when it averaged 3.8bn scfd. In 2016 it was down to 3.3bn scfd, with the downward trend predicted to continue into 2017.

Contrary to the budget statement, however, 2017 ended with better results than forecast, indicating a rebound in gas production. That year T&T produced some 72,000 barrels per day (bpd) of crude oil, 3.4bn scfd of natural gas and 135,000 bpd of refined oil, according to the Ministry of Energy and Energy Industries (MEEI) figures. The rising trend began in July 2017, and by January 2018 LNG production increased by 20% year-on-year to 95.3m scfd, the highest since January 2015, when production reached 1bn scfd. But despite a strong recovery in gas production in the second half of 2017, which created knock-on effects for downstream activities, the IMF cited in its July 2018 report that “oil production remained largely flat, at a historically low level”. Furthermore, the report highlighted lower energy prices, project delays and disruptions to production as a result of pending reforms to tax regulation as critical risks to economic growth.

Nevertheless, some observers remain optimistic about the future of T&T’s energy sector. In a May 2018 press release by Moody’s, the global credit agency projected that the country’s economic rebound would be led by projects in the energy sector. “With a full year of production at Juniper [gas field] in 2018, and prospects for gas production at Shell’s Starfish field to start in the second half of the year, natural gas production could reach 3.8bn scfd by the end of 2018,” Moody’s stated.

Total crude oil and condensate production averaged around 67,000 bpd between January and July 2018, according to the MEEI. Of the 17 oil producers in T&T, Trinmar, a subsidiary of state-owned Petrotrin, reported the highest output average for the first half of 2018 with some 19,000 bpd, followed by its parent company with about 12,000 bpd and France’s Perenco with almost 11,000 bpd.


The global decline in oil prices and subsequent drop in production have encouraged some companies to consider different strategies to address the fiscal challenges. For example, Petrotrin plans to restructure and streamline its activities, and increase production in the wake of a government-commissioned report, submitted in June 2017, that recommended the state-owned company reduce its operating costs (see analysis). “Petrotrin’s restructuring opens a significant business opportunity for all companies in the sector,” Dexter Riley, CEO of Unipet, a local wholesaler of liquid petroleum, told OBG. “It is the next natural move for this industry, as this period is characterised by increased efficiency, accelerated modernisation and further liberalisation,” Riley added.

Petrotrin plans to consult its shareholders on how to enact such a restructuring, and Franklin Khan, the minister of energy and energy industries, told Parliament in March 2018 that the company would likely finalise plans by the third quarter of that year and outlined some of the options being considered. One of these is to split the company into various business units, a strategy that has been adopted by other Latin American state-owned oil firms, such as Mexico’s Pemex. One unit would focus on downstream, refining and marketing derivatives, while the other would focus on upstream activities. The company is also re-evaluating its existing management structure; however, according to Khan, the government was not considering a partial or full privatisation of Petrotrin at the time.

Revenues & Taxes

The global slump in oil prices and subsequent drop in production contributed to deepening Petrotrin’s annual losses, which stood at TT$2.2bn ($326.3m) for the FY 2017/18. Total revenue from energy activities in T&T fell from a peak of TT$28bn ($4.2bn) in 2008 to TT$1bn ($150.3m) in 2017, with the sector’s contribution to GDP dropping from 41.4% in 2012 to 18.8% in 2016, according to the Central Bank of T&T. The state-owned company’s fiscal performance impacted government revenues, which was estimated to have totalled TT$37.8bn ($5.6bn) in FY 2016/17, a reduction of TT$7.1m ($1.1m) on 2015/16 figures.

Furthermore, the oil company also owes the government some $500m in unpaid taxes and royalties, according to international media in August 2018, which contributed to the 2016/17 budget deficit of $12.6bn. Additionally, Petrotrin has an $850m bond payment due in August 2019, and requires a supplementary $300m to complete development of an ultra-low-sulphur diesel plant that it intends to bring into operation by 2020.

Transparency & Exports

T&T is one of the four founding members of CARICOM, an organisation that promotes economic integration and cooperation. In 2017 CARICOM drafted the CARICOM Environmental and Natural Resources Policy Framework for the sustainable management of the region’s natural resources. The country is also a signatory of the Extractive Industries Transparency Initiative (EITI), an international agreement that seeks to produce clear and accurate information regarding the financial flows and payments generated by oil, gas and mining operations around the world.

According to the latest report available under the EITI, in 2016 the oil and gas industry accounted for around 78% of T&T’s total export earnings, contributed around TT$6.6bn ($978.9m) to government revenues and employing around 3% of the population. The US imported more than half of its LNG from T&T until 2012, when increased shale gas production in the US lessened its dependence on imports. Nevertheless, T&T remains a significant exporter of LNG to Latin American countries such as Argentina and Chile, as well as to Spain and South Korea.

However, in 2017 LNG exports in T&T declined by 7.4%, with the country facing a domestic gas shortage as it strives to transition from an oil-based to a gas-dominated energy matrix. The country’s gas production first outstripped oil production in 1994, but peaked around 2010 before declining; however, production is once again on the increase as a result of new upstream developments. According to the IMF, the country’s gas production will be a major driver of economic growth in the near term, while the country’s fiscal deficit is expected to be reduced to an average 4% of GDP as energy revenues rise.

The government is also seeking to improve energy sector revenues through tax reforms, with the 2018 budget mentioning a 12.5% royalty on the production of gas, crude oil and condensate, which came into effect on December 1, 2017. The government expects the new regulation to result in raising revenues from $1bn in 2017 to $3bn in 2018.

Private Game

The rise in oil and gas production in the second half of 2017 can be attributed to increased participation of private companies. Under the EITI, the country’s fiscal regime has incentivised companies to invest, by providing tax rebates and allowances that lower financial burdens.

However, the commodity’s price slumped over the last few years affected those participating in the sector. “The decrease in international oil prices has had a significant impact on the sector, making the past years particularly difficult,” Leon Brunings, CEO of local Ventrin Petroleum Company, told OBG. “Falling profits, coupled with a stringent demand of foreign exchange in the country and increased fiscal obligations, have definitely put an additional burden on the sector,” he added. “That said, companies in the sector seem to have broken even and increased profits are to be expected in the coming years.”

Upcoming Projects

Besides increasing efforts to diversify the economy, the price slump has also encouraged T&T to rethink its strategies across the upstream and downstream production chains, focusing on incentivising and increasing oil and gas production, and streamlining refinery output. As a result, some of the sector’s key players have declared a number of projects in the pipeline.

In June 2017 energy consortium BPT&T (BPTT) made two large gas finds – estimated to contain a total of approximately 2trn scf – at the Savannah and Macadamia wells located offshore the east coast of T&T, in the Columbus Basin. British oil and gas company BP holds a 70% stake in BPTT, with Spain’s Repsol holding the remaining 30%.

BPTT is also the head of operations for the Angelin project, also located in the Columbus Basin, which is estimated to contain 1.5trn scf and be developed at a capacity of 600m scfd. Drilling is expected to commence in the second half of 2018 and the first production is slated for 2019.

The Angelin project is the most recent of BPTT’s 15 offshore developments in T&T. In July 2018 Claire Fitzpatrick, regional president of BPTT, said in a July 2018 press statement that the company envisages a long-term investment plan of up to $8bn, with nine new projects expected over the next decade. Bringing such plans to fruition would require the country to stay competitive within BP’s global portfolio; though T&T remains a key market for the company due to the large demand for gas, it should start looking at evolving its energy operations. “To remain competitive and successful in this environment means that we must change and evolve to keep our operations here attractive to further investment,” Fitzpatrick said. She also added that T&T is an important pilot market for the firm’s new technologies aimed at boosting safety and improving efficiency.

Another major oil and gas player in T&T, Australia’s BHP, announced in a report for the financial year ending in June 30, 2018 that it spud the Victoria-1 exploratory well in June and discovered gas, and that it plans to move its Deepwater Invictus rig to drill the Bongos prospect in the country’s north. BHP also discovered 4-5trn scf at the LeClerc field in 2017, after which it commenced the second phase of its deepwater drilling operation.

In late August 2018 Prime Minister Keith Rowley and Nicolas Maduro, the prime minister of Venezuela, signed an agreement that allows T&T to access its neighbour’s Dragon gas field. The offshore field contains approximately 2.4trn scf of natural gas, and the $100m cross-border project is estimated to produce 150m scfd in the first year of operations, which are slated to begin in 2020. The initial phase of the project is expected to boost the island nation’s gas supply in both the LNG and petrochemicals segments. Production is forecast to increase to 300m scfd further down the track.

The gas will be transported through a 17-km pipeline built in March 2017 by Shell, the National Gas Company (NGC) and state-owned Venezuelan oil company PDVSA to the Hibiscus platform on T&T’s north-west coast, some 18km away.

The new deal is expected to help T&T expand domestic gas production to 4.1bn scfd by 2021, as forecast in the mid-2018 budget review.


Petrotrin’s move to streamline its operations also comes on the back of recommendations made by US-based consultancy firm Poten & Partners that T&T modify its existing agreements with LNG producers. The Gas Master Plan 2014-24 estimated that between 2010 and 2014 the country’s annual revenues dropped by $6bn due to inconsistency between low net returns and high global LNG prices. Overall, the firm estimates that T&T loses around $1.5bn annually due to existing agreements.

In an energy report released in March 2018 the MEEI said it was looking to review the terms of marketing arrangements with LNG producers, and during the report’s presentation, Prime Minister Rowley said that the government would seek to renegotiate contracts with private players across the energy sector. Most LNG contracts are long term, but with many of those linked to the US, falling gas prices have impacted T&T’s revenues, and the country has not reaped the added value that could have been gleaned from higher-performing global LNG markets. Furthermore, the US has become more reliant on domestic shale gas production, for both gas consumption and the manufacturing of petrochemicals and fertilisers. Signing new contracts under different terms when the current agreements expire could help achieve greater levels of revenue.

Atlantic LNG (ALNG), one of the world’s largest producers of LNG, operates the liquefaction facility at Point Fortin on the south-west coast of T&T. Philip Mshelbila, CEO of ALNG, told local press in June 2018 that T&T’s competitive advantage in LNG would allow it to continue capitalising on opportunities in the global LNG market. Moreover, it has benefitted from having established a flourishing midstream and downstream gas sector over the last 20 years.

“Many other resource-rich countries simply focused on the upstream,” Mshelbila said, adding that the next two decades would nevertheless bring a range of new challenges, as the world continues to undergo fundamental changes in energy consumption. ANLG’s contract ends in 2018, and the government and ALNG shareholders were expected to hold negotiations for a new one.

T&T is also working on strengthening bilateral relationships related to LNG exports. In July 2018 Khan met with Mohammed Bin Saleh Al Sada, the minister of energy of Qatar, in Doha and agreed to further their alliance through a memorandum of cooperation in energy-related areas. Both countries are members of the Gas Exporting Countries Forum.

Gas Master Plan

In 2014 the government launched the 2014-24 Gas Master Plan, aimed at setting up a roadmap for the country’s natural gas sector to increase production and reverse the country’s gas shortfall. According to Kevin Ramnarine, the former minister of energy and energy affairs, at the time of the plan’s unveiling in September 2015, “Long-term planning and roadmapping for the natural gas sector are critical to the continued growth, development and further prosperity of T&T.”

The plan is considering critical policy areas, such as allocation of areas for exploration, identification of concepts for deepwater gas development, a review of the country’s current contractual arrangements in upstream activities, as well as gas storage and utilisation, and optimisation of transmission infrastructure. In addition, the plan is aimed at examining the legislative and regulatory framework for the efficient management of the upstream, transmission and downstream sectors, as well as gas investment. Ultimately, this should result in greater certainty for both companies that are already operating in the sector as well as new investors.

The plan was submitted for review in 2017, with consultancy Poten & Partners commissioned by the government to recommend modifications to the plan. One recommendation was that, upon expiry of the existing contracts, future gas supply should be routed through NGC to enable the government to reap maximum benefits from the LNG value chain. According to Poten & Partners, such an expanded role would allow NGC to provide a LNG-linked pricing scheme to upstream suppliers to support new developments, which could then be applied to a basket price of LNG, methanol and ammonia.

The consultancy also expressed that continuing with the current negotiated contracts model would unlikely provide the best value for the country. That recommendation could prove to be unpopular with the private players already active in the market. Shell and BP, the largest shareholders in ALNG’s liquefaction plant, sell gas directly to ALNG, and therefore bypass NGC, and the amendment suggested by the consultancy could impact company revenues.

Power Shift

The country’s power generation is 100% gas-fired, through the use of turbines and combined cycle with heat-recovery steam generators. Total installed capacity at the end of 2017 was 2108 MW, according to the MEEI. Generation is provided by three independent power producers: Powergen, which operates two power plants at Point Lisas and Penal; Trinity Power, which runs the Couva power station comprising three 75-MW gas turbine plants; and Trinidad Generation, which is in charge of a 720-MW combined-cycle facility located at the Union Industrial Estate in La Brea. All of the above plants supply electricity to the T&T Electricity Commission (T&TEC), which is solely responsible for the transmission, distribution and sale of electricity to residential, commercial and industrial consumers.

Given the shortages in the domestic supply of natural gas, there have been calls among both the public and private sectors to shift the country’s energy sector towards renewables. Unlike other Caribbean islands, such as Jamaica, T&T has yet to adopt renewable energy generation, such as solar and wind power, or waste-to-energy projects.

The Energy Chamber, an independent body governed by an annually elected board representing the oil, gas, petrochemicals and industrial sectors, has recommended that efficiency practices and renewables be placed at the heart of the country’s energy policy. According to a report published in June 2018 by the chamber, “The introduction of renewable energy, improving energy efficiency and reducing greenhouse gas emissions have become policy concerns on the government’s agenda.” Rather than viewing them as additional issues, however, the chamber suggests that they be treated as the core of T&T’s energy policy. In the chamber’s perspective, T&T “is one of the least energy-efficient economies in the world and has one of the highest per-capita greenhouse gas emissions rates”. It also added that there are significant opportunities to increase the value of domestic natural gas if the volumes of gas channelled to power generation were reduced. Instead, the gas should flow into the petrochemicals sector or LNG, which would earn much needed additional foreign exchange.

Government Efforts

In 2016 the government declared its commitment to the protection of the environment and the promotion of renewable resources to increase energy security and reduce dependence on fossil fuels. The government set the target of 10% of electricity generation from renewable energy resources by 2021.

To help achieve this goal, the government plans to install wind farms to generate 5% of the country’s power needs by 2020, and is seeking to establish a legislative framework for the generation of electricity from renewable energy sources that would include amendments to the T&TEC Act, as well as the introduction of a feed-in tariff policy. An increase in the use of renewable energy sources for electricity generation would free up more gas to be exported, as well as channelled to the production of LNG, fertilisers and petrochemicals.

In 2015 T&T received an Inter-American Development Bank (IADB) loan of $60m to implement a sustainable energy programme, which was delivered with a raft of recommendations from the IADB and a pledge for technical assistance in the development of policies and activities to promote the deployment of renewable energy and the implementation of energy efficiency measures. In its 2015 report titled “A Unique Approach for Sustainable Energy in T&T”, the IADB stated that the country’s CO emissions per capita from electricity generation activities were 2.5 times above the global average, and recommended strategies to improve the efficiency of the existing electricity generating plants and the incorporation of a small percentage of renewable energy-based generation over the coming years.


Falling global oil prices and a drop in production have spurred T&T to consider more stable sources of energy to boost its economy.

How- ever, despite increasing interest in renewables, the country is still focused on developing its natural gas segment. Upcoming gas projects, including the Dragon gas field deal with Venezula, and recent output figures are encouraging a positive outlook for the sector, with the rebound in gas production levels expected to continue on an upward trajectory.