Home' Trinidad and Tobago Guardian : May 1st 2014 Contents Recent pronouncements about
upcoming projects in the T&T
energy sector spurred energy
service sector optimism for
With T&T s oil production on a decline over
the past ten years, the announcement of the
winners of the 2013 Petrotrin Onshore Bid
Round was welcome news for the industry.
The St Mary s Block was awarded to Range
Resources, the Rio Claro Block to Lease Oper-
ators Ltd and Primera Oil and Gas has been
awarded the Ortoire Block.
According to the Minister of Energy and
Energy Affairs, the three onshore blocks will
possibly generate US$945 million during the
exploration phase. This bodes well for not
only for upstream activity in the sector, but
will also lead to an increase in tax revenue for
At the Energy Chamber s sold out 2014 T&T
Energy Conference the minister highlighted
other developments in train for the rest of the
year. A new gas master plan, a new and defined
strategy for increasing local content, an expect-
ed 11 exploration wells (10 offshore and one
onshore) to be drilled, and the highly antic-
ipated Juniper development by BP suggest a
revival in upstream activity this year.
Levels of optimism
Through our quarterly Energy Services Sector
Survey (ESSS), we are able to consistently
gauge the level of confidence that energy serv-
ice contractors have in the activity of the sector.
The survey draws on information such as the
level of confidence of service contractors and
their plans for investment and expansion,
employment and training.
With such exciting developments ahead, it
is clear why the energy services companies
were more optimistic about the business cli-
mate in Q1 2014 than they were in Q4 2013.
In fact, 52 per cent of respondents were more
optimistic, most of which cited an increase in
upstream activity, new opportunities in inter-
national markets and an improvement in the
economic environment as the reasons for their
hopefulness. These respondents represent both
upstream and downstream energy services
companies; however most of them provide
services to the upstream sector.
Value and volume of business
The majority of those companies surveyed
(42 per cent) anticipate that their value of
business will be normal in Q2 2014. Thirty-
two per cent of the respondents expect that
the value of their business will be above normal
in the next quarter. Additional contracts, an
increase in their average selling process and
a jump in the demand for their services were
highlighted as reasons for their optimism.
As it relates to expectations of the volume
of business in Q2, more respondents (52 per
cent) mentioned that they anticipate that their
volume of business will be above normal. They
cited an increase in additional contracts to be
the main reason. However, 29 per cent of the
respondents anticipate that a lack of business
opportunities will lead to a less than normal
performance in the volume of their business.
Employment and training
In Q2 2014, energy services companies do
not plan to significantly increase or decrease
the amount of persons employed. Only 25 per
cent of respondents indicated that they will
increase manpower while 50 per cent of
respondents indicated that there will be no
change in the total number of persons
employed in their respective organisations.
Nevertheless about 67 per cent intend to
expand their business more over the next 12
months, than they did over the past 12 months.
During the next 12 months the majority of
capital spending will be to provide new services
(50 per cent), to reach new customers (44 per
cent), and to expand capacity (44 per cent).
Still, companies believe that there are certain
factors which are likely to inhibit their capital
spending over the coming 12 months.
When asked about this, an uncertainty about
demand/business prospects (63 per cent), an
inadequate return on investment (42 per cent)
and a lack of internal funding (21 per cent)
were put forward as the major obstacles.
Over the past two years, energy sector activ-
ity has been dominated by the upstream sector.
However, last year there was a change where
the co-ordinated maintenance boosted job
opportunities for downstream services com-
panies on the Point Lisas Industrial Estate and
at Atlantic s facilities in Point Fortin.
With the turnarounds behind us and only
one downstream development on stream (that
is, Mitsubishi-DME plant), it will be interesting
to see what the views of downstream energy
services companies will be over the course of
the year, as most of the jobs are expected to
be generated in the upstream sector.
For more information on this article, please
contact Nazera Abdul-Haqq at nazera@ener-
MAY 2014 • WEEK ONE www.guardian.co.tt BUSINESS GUARDIAN
COMMENTARY | BG15
Energy services sector
more optimistic in Q1
over upstream activity
Thirty-two per cent
of the respondents
expect that the
value of their
business will be
in the next quarter.
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