Raphael John-Lall

En­er­gy econ­o­mist Fran­cis­co Monal­di is hop­ing that eco­nom­ics trump pol­i­tics at the end of day and T&T’s en­er­gy deals with Venezuela will sur­vive, de­spite the po­lit­i­cal un­cer­tain­ty in T&T, Venezuela and the US.

Lat­er this year, T&T will have a new Prime Min­is­ter.

Venezue­lan op­po­si­tion leader Ed­mun­do González claims he will be­come Pres­i­dent on Fri­day, the date of Pres­i­dent Nicolás Maduro’s in­au­gu­ra­tion for a sec­ond term, and on Jan­u­ary 20, Don­ald Trump will be the Unit­ed States’ new Pres­i­dent.

Last Fri­day, Prime Min­is­ter Dr Kei­th Row­ley an­nounced that he will not be of­fer­ing him­self up for re-elec­tion, end­ing his 45-year po­lit­i­cal ca­reer.

Row­ley who spoke to re­porters last week­end, af­ter chair­ing the screen­ing for nom­i­nees for the To­ba­go East and To­ba­go West con­stituen­cies for this year’s gen­er­al elec­tion, said his last wish is see­ing T&T re­gain its place as an en­er­gy gi­ant.

“Whether it’s a few weeks or a few months, putting T&T in a po­si­tion to have Point Lisas be­come the gate­way in­to the world mar­ket for Venezue­lan gas and bring­ing our cross-bor­der gas at Man­a­tee and Cocuina-Man­akin to Point Lisas; if I have done noth­ing else, get that done, as we are get­ting it done. That, to me, is the high­light of my po­lit­i­cal ca­reer,” he said.

Row­ley, and the cur­rent ad­min­is­tra­tion, have pinned T&T’s eco­nom­ic hopes on the Drag­on gas field project, signed in 2023, com­ing to fruition, when he stat­ed in Sep­tem­ber 2024 that T&T’s cit­i­zens should ex­pect “dif­fi­cult” times un­til the sec­ond quar­ter of 2027, when new nat­ur­al gas pro­duc­tion is ex­pect­ed.

How­ev­er, T&T’s op­po­si­tion Unit­ed Na­tion­al Con­gress has tak­en a more ag­gres­sive ap­proach to­wards Venezuela.

Op­po­si­tion leader Kam­la Per­sad-Bisses­sar has been crit­i­cal of Row­ley’s re­la­tion­ship with the Venezue­lan gov­ern­ment say­ing that Venezuela should stay out of Guyana and us­ing the term “nar­co-traf­fick­ing regime” to de­scribe the Maduro ad­min­is­tra­tion.

For en­er­gy an­a­lysts, that sit­u­a­tion begs the ques­tion of what will be the state of T&T’s en­er­gy re­la­tion­ship with Venezuela if T&T’s op­po­si­tion wins the elec­tion lat­er this year and al­so when Trump as­sumes of­fice in less than two weeks.

Monal­di told the Busi­ness Guardian that in­ter­na­tion­al en­er­gy com­pa­nies are in­volved and the coun­tries’ lead­ers un­der­stand the “strate­gic” im­por­tance of the nat­ur­al gas re­serves be­tween T&T and Venezuela.

“This is an un­cer­tain time on all fronts: What might hap­pen in Venezuela; what might hap­pen with the US pol­i­cy; and the un­cer­tain­ty in T&T. All of these de­vel­op­ments could af­fect the Drag­on gas project. Oth­er things like Shell’s oth­er in­vest­ments and the price of Liqui­fied Nat­ur­al Gas (LNG) could al­so add to the un­cer­tain­ty.

“I am not sure of the po­ten­tial im­pli­ca­tion from a change of gov­ern­ment in T&T and its re­la­tions with Venezuela, but my sense is that the strate­gic na­ture of nat­ur­al gas projects for both coun­tries is sig­nif­i­cant enough that they will try to avoid get­ting that mixed up with broad­er re­la­tions in terms of what will hap­pen with the US or with Guyana or what might hap­pen with­in T&T. I think it has enough strate­gic im­por­tance for both coun­tries that they will con­tin­ue to con­sid­er the gas projects a pri­or­i­ty and will keep it out of oth­er po­lit­i­cal ten­sions.”

Speak­ing about Trump’s like­ly poli­cies to­wards Venezuela and its im­pact on the en­er­gy re­la­tion­ships, Monal­di said if the sit­u­a­tion “es­ca­lates” then there could be a tougher stance by the Trump ad­min­is­tra­tion.

“If there is vi­o­lence, if op­po­si­tion leader Maria Macha­do is de­tained, or any­thing of that na­ture, that will make it more like­ly that the Trump ad­min­is­tra­tion will be harsh in terms of Venezue­lan poli­cies and that might mean that the long-term li­cence for the Drag­on gas might not hap­pen any time soon.”

He said Trump ap­pointees like Mar­co Ru­bio, who is ex­pect­ed to be the next Sec­re­tary of State and Chris Lan­dau, for­mer US Am­bas­sador to Mex­i­co, as the next deputy Sec­re­tary of State will be im­por­tant in over­see­ing US pol­i­cy for Latin Amer­i­ca.

“All these ap­point­ments point to­wards a hawk­ish po­si­tion to­wards Venezuela. That does not nec­es­sar­i­ly mean that they will can­cel the li­cences, but they will es­ca­late the rhetoric and that could mean a tough­en­ing of sanc­tions. The on­ly ex­cep­tion in those ap­point­ments is Richard Grenell, who is Trump’s en­voy to Venezuela. That could point to a dif­fer­ent strat­e­gy, a much more strate­gic strat­e­gy. Har­ry Sargeant, an en­tre­pre­neur who is close to Trump, has been push­ing for a more prag­mat­ic ap­proach. The Wall Street Jour­nal re­port­ed on it. The idea is if Pres­i­dent Maduro takes back im­mi­grants and of­fers good deals to Amer­i­can com­pa­nies then the US will be more flex­i­ble with sanc­tions. Of course, Shell is not an Amer­i­can com­pa­ny but I think in that sce­nario the gas li­cences will be guar­an­teed.”

Monal­di em­pha­sised that the gas li­cences are dif­fer­ent from oil li­cences and that BP and Shell are not Amer­i­can com­pa­nies.

“If they have a ra­tio­nal pol­i­cy, the new US ad­min­is­tra­tion will be much more prone to ap­prove the nat­ur­al gas li­cences. Of course, it mat­ters that BP and Shell who are do­ing busi­ness be­tween T&T and Venezuela are Eu­ro­pean and not Amer­i­can be­cause for the Trump ad­min­is­tra­tion, Amer­i­can com­pa­nies will come first.”

T&T econ­o­mist Dr Vanus James told Busi­ness Guardian that these are in­ter­na­tion­al agree­ments in­volv­ing for­eign com­pa­nies and the op­po­si­tion’s crit­i­cism of the Venezue­lan gov­ern­ment may not nec­es­sar­i­ly trans­late in­to can­celling the nat­ur­al gas projects if they as­sume pow­er lat­er this year.

“It could be, but need not be. These agree­ments are con­trac­tu­al, so un­less the new ex­ec­u­tive opts to can­cel the agree­ment it can be main­tained. Specif­i­cal­ly, Kam­la Per­sad-Bisses­sar’s past crit­i­cisms do not im­ply au­to­mat­ic can­cel­la­tion of the agree­ments if she takes over. In any event, the mat­ter may well be aired in pub­lic dur­ing the up­com­ing elec­tions and she can re­fine her stance in the pub­lic in­ter­est, if she wish­es to do so, af­ter con­sid­er­ing the forex re­al­i­ties.”

Re­spond­ing to the ques­tion of how all of this will im­pact T&T’s fu­ture eco­nom­ic for­tunes, James said this dis­cus­sion is ur­gent as T&T needs new forms of rev­enue to dri­ve its econ­o­my.

“It could of course, es­pe­cial­ly in light of the cur­rent de­pen­dence of the coun­try’s forex sup­ply on the for­tunes of the en­er­gy sec­tor. This con­di­tion of un­cer­tain forex sup­plies is not fixed and im­mutable; even though it has been with us since the days of sug­ar. Row­ley failed to ad­dress this de­pen­dence be­cause he had no idea how to, but there are fruit­ful ways to trans­form the econ­o­my to ad­dress the de­pen­dence in rea­son­able time.

“How­ev­er, to move in that di­rec­tion re­quires the re­form of the con­sti­tu­tion that Row­ley failed to lead. Among oth­er things, crit­i­cal to that re­form would be arrange­ments to dis­pense with dic­ta­to­r­i­al ex­ec­u­tive gov­ern­ment and lib­er­ate the en­tre­pre­neur­ial po­ten­tial of in­clu­sive com­mu­ni­ty gov­ern­ments all across the coun­try. The coun­try needs a se­ri­ous dis­cus­sion about how and why mean­ing­ful con­sti­tu­tion re­form un­der­writes di­ver­si­fi­ca­tion of our ex­port ca­pac­i­ty and econ­o­my as a whole,” said James.