Home' Trinidad and Tobago Guardian : January 25th 2018 Contents L
istening to Energy Minister
Franklin Khan’s speech at the
opening ceremony of Monday’s
Energy Conference 2018 proved
to be quite the mind-bending ex-
On one hand, it seemed as if the minister
was issuing plaudits to the sector, while with
the other, he seemed to be taking it away.
As the entire nation knows (because of the
constant reminders from the government), the
energy sector has not been the shining star it
typically is for the T&T economy over the last
three to four years. From a pricing perspec-
tive, it’s a situation over which we have—and
will continue to have—little to no control.
From a production perspective however,
much work is being done by many firms to
boost local production and output from the
sector. That said, two areas that the energy
minister chose to focus on in his speech pro-
vide fodder for healthy conversation.
The energy minister made it a point to ad-
dress the issue of local content in the sector to
all and sundry in attendance stating that it was
a “pet peeve” of his government.
While acknowledging the industry as capi-
tal-intensive, and thus demanding a relatively
low labour component, he went on to state
that more needed to be done by energy com-
panies to hire university graduates, on whom
the State has spent over $600 billion via the
GATE programme, in the technical areas. He
also—briefly—entreated local companies to be-
come more “reliable and competitive” where
labour related issues were concerned.
Permit me to spend a moment on this last
Firstly, issues of competitiveness must be
honestly addressed. Truthfully, it is our re-
sponsibility as a country to sort out our local
content and competitiveness issues. That said,
many local companies in the sector have fallen
victim to the damaging effects of trade union
posturing and an industrial relations culture
that, over the last few years, in large measure,
has directly impacted the perception of T&T as
a “competitive” jurisdiction. As a result, this
has done our local companies no favours.
For the minister to just “talk around” this
was perhaps a good political move (so as to
not raise a hornets nest), but one that didn’t
lay the blame—in some regard—squarely where
The move by BP to build its Angelin platform
in the Gulf of Mexico (lest we forget it was told
to by one union leader to “take its platform
and go”, which it did) shows quite clearly that
the energy majors doing business in T&T are
now willing to explore their options when it
comes to maximising their spend—and rightly
Thursday, January 25, 2018
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Securing T&T’s energy future
Energy Minister Franklin Khan presents his opening address on January 22 at the 2018
Energy Conference at the Hyatt Regency Hotel, Port-of-Spain.
PICTURE AYANNA KINSALE
All told, the local energy industry is at an inflexion point. T&T’s position as the energy
sweetheart of the Caribbean is under threat from forces intrinsic and extrinsic to us.
Companies that are investing billions of US
dollars owe it to their shareholders to make
decisions that promote efficiency, where ever
that may take them. So while more can be
gleaned from the sector through local content,
tackling the fundamental causes that ham-
per our competitiveness going forward and
not just imploring the companies to be more
competitive must be frontally addressed.
In fact, there are elements within the pur-
view of the state that are bearing down di-
rectly on the competitiveness of our energy
enterprises. Issues such as port efficiency, for-
eign exchange and industrial park rental fees
should also be dealt with in this discussion.
One can be certain that our local companies
are not playing some sick game to try to be
uncompetitive. They will always try to be as
competitive as any jurisdiction.
Sadly, the reality is that sometimes forces
work against that effort—to our detriment.
The energy minister also focused on the
flow of funds throughout the local energy in-
dustry value chain, pointing out that the con-
cept of “value maximisation” has been at the
expense of the State (the resource owner) for
far too long.
He cited work done by energy consulting
firm Poten and Partners in their Gas Master
Plan report which he said illustrated the “great
disparity” in value that accrued to the State
versus the energy companies from the monet-
isation of T&T’s hydrocarbon resources.
Khan noted that, as a result, the government
was reviewing its suite of allowances (which
he called “generous concessions”) and the tax-
ation system under which oil and gas compa-
The topic of allowances and fiscal incentives
has always been an interesting issue for gov-
ernments to contend with and has been the
subject of much back and forth between past
and present ministers—particularly those ini-
tiated in 2014.
Politics aside, it would appear that the 2014
incentives had little or no impact on fiscal
revenues since their introduction. Oil and gas
firms have had little or no taxable income in
recent years against which many of these al-
lowances could be applied.
Put differently, talk of tightening up allow-
ances and fiscal incentives when they have not
even be utilised by companies is a bit of mis-
direction that the government keeps engaging
All told, the local energy industry is at an
inflexion point. T&T’s position as the energy
sweetheart of the Caribbean is under threat
from forces intrinsic and extrinsic to us. Fortu-
nately, firms are engaging in the task of work-
ing together to ensure sustainability for many
years to come.
One can certainly agree with the minister
that the State should benefit appropriately
since energy resources are the patronage of
the people, but the people must also work to
ensure the country remains competitive well
into the future.
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