Home' Trinidad and Tobago Guardian : December 9th 2015 Contents A17
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The price of crude re-
mained near its lowest level
since early 2009 yesterday.
West Texas Intermediate
(WTI) crude, the price that
affects T&T s oil industry,
slipped eight cents, or 0.2
per cent, to US$37.33 a barrel
in New York, while Brent
crude, the international
benchmark, edged down 11
cents, or 0.3 per cent, to
US$40.61 a barrel in London.
WTI eventually closed the
day at US$37.51, while Brent
crude ended at US$40.26 a
barrel in London. T&T s
budget is based on an oil
price of US$45 a barrel.
Oil prices continued their
slide amid fears the world is
running out of capacity to
store crude as a global glut
intensifies. The global over-
supply is being compounded
by Opec s failure on Friday to
agree a production ceiling,
with members Iran and Iraq
promising to ramp up output
and exports next year.
Brent and WTI futures
both fell more than 6 per
cent on Monday, and on yes-
terday they hit fresh lows last
seen during the credit
crunch of 2008/09.
Diversification of T&T s economy
seems clichéd but CEO of the Energy
Chamber Dr Thackwray Driver says fail-
ure to do so by successive governments
is one of the causes of the current reces-
However, he added, if ever there was
a need to strengthen revenue potential
in the non-energy sectors, now is that
"Obviously when we are highly reliant
on one sector, when that sector goes into
a decline it really shows up the problem
of a lack of diversification in the econ-
omy," Driver told the T&T Guardian yes-
"You can only diversify your economy
if you can competitively produce other
things which the world wants to buy.
"We need everything from agriculture,
tourism, services, exports and the man-
ufacturing sector---all of those things.
"Now is the time when you really have
to look to diversification. Necessity is the
mother of invention."
Driver added: "Over the past year we
have had low prices and we have pro-
duction declining, so that means the ener-
gy sector has been shrinking and that is
what is creating the recession for the
He said energy companies were trying
to increase their productivity and effi-
ciency to ensure they remain competitive,
especially in the global market.
However, they could not avoid the cur-
The world is experiencing low oil prices
and indicators suggest it may be so for
Driver said energy companies have to
find a way to respond to that situation.
"I don t think we should fool ourselves
and think there is going to be a sudden
jump back up in prices and everything is
going to be fine," he said.
"It is about going for the long haul and
trying to fix those structural weaknesses
that we have in the economy to make
sure we are competitive." (KF)
Cheap Chinese steel has driven global
prices down and may be the reason behind
ArcelorMittal s shut down and retrench-
ment of 800 workers.
That is the view of Energy Chamber CEO
Dr Thackwray Driver who said global prices
have nosed dived because China has changed
from steel production mainly for domestic
use to exporting to the international mar-
Driver was commenting on the lay off of
600 workers by Arcelor Mittal on Monday,
just months after the company sent home
some 200 workers from it steel plant at the
Point Lisas Industrial Estate. The Indian-
based multinational company, the world s
leading steel and mining company with a
presence in 60 countries, said it has scaled
down its T&T operations due to an over-
supply of steel in the global market and a
decrease in orders of it direct reduced iron
(DRI) and steel products.
Speaking to the Guardian at an Energy
Chamber breakfast seminar at Cara Suites
Hotel and Conference Centre, Claxton Bay
yesterday, Driver said increased exports of
cheap steel from China has resulted in steel
plants around the world are closing down.
"Obviously for ArcelorMittal, they have
stopped production in Trinidad so we have
no revenue coming in," he said.
China produces almost half of the world s
steel and buys more than two-thirds of its
seaborne iron ore. As the country goes
through economic decline, which has slowed
construction, steel makers there have stepped
up exports to compensate for the shortfall.
Bloomberg reported yesterday that "steel
exports by China had exceeded 100 million
metric tons for the first time as iron ore
imports increased amid a shuttering of high-
cost domestic supply."
Driver said plants that are surviving glob-
ally are those with the highest productivity
levels and lowest production costs. While
T&T s production costs are generally low
because of cheap electricity, the shortage
of gas to the plant has affected their output.
With ArcelorMittal facing a possible clo-
sure of its T&T operations, he said, there
will be less Government revenue and foreign
currency coming in.
"Trinidad will become one of the locations
which they look to close. If we re not com-
petitive, people are not going to go on pro-
ducing and investing in Trinidad."
The ArcelorMittal facility in T&T produces
hot-briquetted iron (HBI) used as a feed
material in steel production. The plant at
Point Lisas, which was built in 1996 and
began operations in 1999, has the capability
of producing 550,000 tons of HBI annu-
China steel takes
toll on ArcelorMittal
Jerome Chambers, president of the T&T Chamber's NOVA Committee, left, Jennifer Daniel, permanent secretary in the Ministry of
Labour and Catherine Kumar, CEO of the T&T Chamber, taking selfies at the Nova Committee's Business Reception at the Hotel
Normandie, St Ann's. The event was sponsored by blink|bmobile.
Oil prices hit fresh lows
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