Home' Trinidad and Tobago Guardian : November 20th 2014 Contents NOVEMBER 2014 • WEEK THREE www.guardian.co.tt BUSINESS GUARDIAN
ENERGY | BG9
The Energy Chamber has
asked the consultants
preparing a Natural Gas
Master Plan to consider the
possibilities of this country
having to import gas from
Venezuela to meet the demands of the coun-
try's gas-based industries.
In a presentation to consultants from UK-
based firm Poten & Partners, the chamber
asked the consultants to plan for the pos-
sibility that the country does not have
enough natural gas to support its petro-
In an e-mailed response to questions from
the Business Guardian, the chamber wrote:
"In the longer-term T&T may have to
consider importing gas to provide energy
or feedstock for our industry. The plan
should consider the implications of this and
the possibilities of importing gas from
The CEO of the Energy Chamber, Dr
Thackwray Driver, was quick to point out
that the plan is for the long-term and should
therefore consider all scenarios but it comes
at a time when the country is not producing
enough gas to meet the demands of the
downstream sector and after Ryder Scott
revealed that for yet another year this coun-
try's natural gas reserves have declined.
In launching the Natural Gas Master Plan
Energy Minister Kevin Ramnarine noted
that this was one of the most important
studies to be conducted by the Ministry of
Energy and Energy Affairs as it sought to
provide a plan for the future of the natural
gas sector. The last plan was conducted
some 13 years ago in 2001 and submitted
in January 2002.
Ramnarine said the plan, once completed,
will give more certainty to the companies
that already operate in the energy sector as
well as to future investors as to what are
the government's medium-term plans for
the natural gas sector.
The Energy Chamber said in addition to
the possibility of importing gas it wanted
the consultants to also consider:
• Increasing the value from the gas indus-
try while volumes remain stable: As the
volume of gas produced in T&T is unlikely
to increase in the medium term, the empha-
sis needs to be on how more value can be
created by the industry. This implies actions
around local content and also fostering
increased linkages between the gas industry
and the rest of the economy, in particular
export oriented sectors.
• Institutional reform and regulatory over-
sight: The plan should consider the best
institutional structure to ensure the con-
tinued growth of the gas industry and the
best structure to encourage investment.
• Industry structure and acreage alloca-
tion: Attracting upstream investment means
making sure that the right companies are
able to access the right acreage.
• Storage: There have been various pro-
posals suggested in the past for methods to
have short-term storage of gas available to
ensure supply if there are upstream pro-
duction problems. The feasibility of these
need to be examined.
• Energy efficiency: T&T is current very
inefficient with respect to the usage of gas
including for electricity generation and con-
sumption. Increasing efficiency will allow
us to generate more value for our gas pro-
• Subsidies: In order to increase efficiency,
T&T needs to explore the phasing out of
subsidies that encourage wastage.
• Efficiency of capital investment and
industry collaboration: While there is an
overall need to increase capital investment
into the upstream energy sector, the plan
should also consider measures to maximise
the efficiency with which capital is deployed
to ensure the best overall returns to the
country. This includes measures to enhance
industry collaboration and increase the use
of shared infrastructure to maximise effi-
It said the overall message of the Energy
Chamber to the consultants was that the
gas master plan needs to encourage sustained
high levels of investment into the upstream
gas industry if we are to meet the existing
demand for gas in T&T.
"While the previous gas master plan was
written in the context of rapid expansion
of the volume of gas production, this master
plan is being written in the context of main-
taining the current plateau of production,"
the Energy Chamber noted.
The Natural Gas Master Plan is expected
to be completed within the next six months.
Oilfield services provider Baker Hughes Inc said
on November 13 it is in preliminary merger talks with
its larger rival Halliburton Co, though any potential
deal would likely face antitrust concerns.
Two people familiar with the matter, who spoke
on condition of anonymity, said Halliburton was
looking to buy Baker Hughes, in what would be the
second-largest energy deal of this year.
Oil prices have slid by a third since June, eroding
demand for drilling services and pummeling stock
prices across the energy sector. That has prompted
a flurry of chatter among executives and bankers
about acquisition opportunities.
A tie up between the No 2 and No 3 players in
the services industry might allow them to better
weather the downturn and resist pressure from oil
producers to slash prices.
Baker Hughes said in a statement it has "engaged
in preliminary discussions with Halliburton Company
regarding a potential business combination transac-
Halliburton declined to comment on the talks,
which were first reported by Dow Jones and in The
Wall Street Journal.
A potential merger would create a drilling, logistics
and well services giant worth US$67 billion, initially
with 140,000 employees.
But the merged entity would be only half the size
of industry leader Schlumberger, which has a market
capitalisation of US$125 billion.
If a deal were struck, the companies could well
have to sell assets to convince regulators they would
not hurt competition, said Seth Bloom, a veteran of
the US Department of Justice's antitrust division now
in private practice.
"The question with mergers like this is are there
divestitures of submarkets that can solve the problem,"
Bloom said. "It's clearly not a slam dunk to approval,
but it's not automatic that you can't get it through.
You have to drill down to see what the markets are
The deal is also likely to draw the scrutiny of reg-
ulators in Europe, China, Brazil and Mexico, others
experts said. Arguably, the antitrust concerns would
be greatest outside the United States, where there
are relatively few services companies.
There are at least seven major product lines where
there is overlap between the two companies. The
companies offer scores of services and technology,
from drill bits, to cementing and casing work, to arti-
ficial lift systems that improve output from wells.
An analyst who follows the company and did not
want to be quoted said Halliburton could get the deal
down with a mix of debt and equity and still maintain
its investment rating.
News of the talks sent shares of another services
company, Weatherford International Plc, which has
long been seen as vulnerable, up nearly six per cent.
The last major deal in the energy industry,
announced in August and worth some US$70 billion,
was pipeline giant Kinder Morgan Inc's move to fold
its various units into a single entity. (Bloomberg)
Include effects of
importing Venezuelan gas
Energy Chamber on Natural Gas Master Plan:
merger talks with
A potential merger
would create a drilling,
logistics and well
services giant worth
US$67 billion, initially
with 140,000 employees.
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