Home' Trinidad and Tobago Guardian : June 20th 2013 Contents Avibrant energy services sub-
sector is integral to the over-
all health of the energy sec-
tor. It is a source of local
content as well as an impor-
tant competitive pillar for
T&o to sustain its long term growth through
The energy services sector is a viable source
of employment and some of these services
offered include pipeline construction services,
welding and fabrication, insulation works and
providing chemicals for oil and gas processing
In 2012, the energy services subsector
recorded the largest growth spurt of all the
energy subsectors, rising by approximately
32.4 per cent year-on-year. While the energy
services sector does not contribute the most
to energy sector gross domestic product (GDP),
the growth of energy services subsector GDP
is a good indication of its potential to add
more value to GDP (See Figure 1).
A good way to gauge the business climate
of the energy services sector is to examine the
level of confidence that energy service con-
tractors have in the activity of the sector. The
Energy Chamber s Energy Services Sectors
Survey (ESSS) is a quarterly survey of energy
services contractors which allows for such an
The survey draws on information such as
the level of confidence of service contractors
and their plans for investment and expansion,
employment and training.
Data collected from the ESSS shows that
most survey participants were generally more
optimistic about the business environment in
the energy services subsector in Q1 2013.
Approximately 55 per cent of the respondents
claimed to be more optimistic than they were
three months prior.
In fact, almost 50 per cent of the respondents
expect that the value and volume of business
will improve in Q2 2013. (Refer to Figure 2.)
Several announcements on proposed upstream
and downstream developments have prompted
these spikes in optimism.
In an effort to stimulate increased land-
based oil production, Government recently
offered three onshore blocks for exploration
and development. The three blocks, Rio Claro,
St Mary s and Ortoire are located in the South-
ern Basin and total an estimated 150,000 acres.
The bid round for these blocks will officially
close on August 30.
There are several key selling points for the
acreage, such as the availability of well and
seismic data, as well as the proximity to existing
infrastructure and other producing fields. Also,
this month a new deep water bid round opened
and companies will able to nominate up to
six blocks until the round closes in Novem-
These bid rounds come at a time when the
level of activity in the upstream sector is high.
Currently, there are five rigs operating offshore
and another eight operating on land; a far cry
from early 2009 when at times there was one
rig operating offshore.
In fact, over the past two years, there has
been a consistent level of activity in the
upstream sector, which is a completely different
scenario to activity levels in the downstream
There have been no new downstream proj-
ects under construction for over five years and
while the announcement of the green light
for the Neal and Massy Methanol to DME
project has sent positive signals there are still
some concerns. For instance, two major down-
stream projects---Sabic methanol to
petrochemcials and Carisal calcium chloride
plant---have been cancelled for varying reasons
in the past year.
Due to gas shortages, coordinated turn-
arounds are the new reality. However, they
impact on both upstream and downstream
service providers as the "bunched-together"
work places strain on manpower and equip-
ment mobilisation and do not allow service
companies to space out/properly plan their
work commitments throughout the year.
Employment and capital spending
In Q2 2013, energy service companies do
not plan to significantly increase or decrease
the amount of persons employed. However,
47 per cent of the respondents indicated they
intend to increase expenditure on training and
retraining employees as well as hire more tem-
Generally, companies operating across the
oil and gas value chain are reviewing their
capital expenditure plans as many planned or
proposed projects have been rescheduled, while
a significant number of ongoing projects have
been deliberately slowed down or suspend-
ed.In the next 12 months the majority of capital
spending within the energy services sector
will be on plant, machines and vehicles (50
per cent). The majority of capital authorisations
will be undertaken to provide new services.
Most of the respondents expect to see no
major changes in capital expenditure on
land/building or on information technology.
See Figure 2.
While the upstream sector continues to be
buoyant, the downstream sector is facing its
share of obstacles with a lack of new projects
and coordinated maintenance having serious
impacts on the services sector. Due to the uncer-
tainty in demand in T&T it is important for
local energy services companies to seek inter-
national markets for their goods and services.
The Energy Chamber continues to work
with member companies in assisting them to
explore opportunities in international markets.
We remain committed to the diversification
of exports from T&T and the Caribbean,
through the development of new export mar-
kets in the energy services sector.
For more information on this article, please
visit our Web site at: www.energy.tt
JUNE 2013 • WEEK THREE www.guardian.co.tt BUSINESS GUARDIAN
COMMENTARY | BG19
up in Q1 2013
Over the past two years,
there has been a consistent
level of activity in the
upstream sector, which is a
scenario to activity levels in
the downstream sector.
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