An­drea Perez-Sobers

Se­nior Re­porter

an­drea.perez-sobers

@guardian.co.tt

T&T’s eco­nom­ic ex­po­sure to de­vel­op­ments in Venezuela has moved in­to sharp­er view, with one econ­o­mist and busi­ness lead­ers warn­ing that en­er­gy se­cu­ri­ty, for­eign ex­change earn­ings and fis­cal sta­bil­i­ty re­main close­ly linked to the coun­try’s re­la­tion­ship with its near­est neigh­bour.

All spoke with Guardian Me­dia af­ter the US mil­i­tary con­duct­ed strikes in Venezuela, which led to the cap­ture of Venezue­lan leader Nico­las Maduro and his wife ear­ly yes­ter­day morn­ing.

Econ­o­mist Mar­i­ano Browne said the coun­try’s fu­ture “in large mea­sure” hinges on nat­ur­al gas re­sources that are ei­ther shared with, or lo­cat­ed with­in, Venezue­lan wa­ters. He iden­ti­fied the Man­akin–Cocuina and Drag­on gas fields, along with Man­a­tee, as cen­tral to the coun­try’s near-term en­er­gy out­look.

Browne de­scribed T&T as a ma­ture hy­dro­car­bon province, not­ing that the like­li­hood of large, eco­nom­i­cal­ly vi­able dis­cov­er­ies in shal­low wa­ters is lim­it­ed. In that con­text, co­op­er­a­tion with Venezuela has long been viewed by suc­ces­sive gov­ern­ments as es­sen­tial to main­tain­ing gas sup­plies, sus­tain­ing petro­chem­i­cal pro­duc­tion, and pre­serv­ing for­eign ex­change in­flows.

He re­called that when the Maduro ad­min­is­tra­tion sus­pend­ed arrange­ments with T&T, the Man­a­tee project was among those af­fect­ed. That move, Browne ex­plained, ef­fec­tive­ly re­moved the coun­try’s most sig­nif­i­cant short-term gas op­tion and ex­posed the do­mes­tic en­er­gy sec­tor to height­ened geopo­lit­i­cal risk.

While re­cent de­vel­op­ments in Venezuela could open the door to re­newed co­op­er­a­tion if a fu­ture ad­min­is­tra­tion proves more re­cep­tive to en­gage­ment with T&T, Browne warned that the sit­u­a­tion re­mains flu­id. He drew at­ten­tion to un­re­solved ques­tions sur­round­ing the po­si­tion of the Venezue­lan mil­i­tary, stress­ing that no civil­ian gov­ern­ment can op­er­ate se­cure­ly with­out its ac­cep­tance.

That un­cer­tain­ty, he main­tained, feeds di­rect­ly in­to T&T’s own eco­nom­ic prospects.

Browne con­nect­ed on­go­ing gas short­ages to re­cent in­dus­tri­al chal­lenges, ar­gu­ing that cur­rent sup­ply lev­els are in­suf­fi­cient to sup­port long-term con­tracts for ma­jor down­stream op­er­a­tions. He point­ed out that al­though nat­ur­al gas out­put has risen by rough­ly 11 per cent, over­all pro­duc­tion re­mains well be­low in­stalled ca­pac­i­ty at Point Lisas.

Point Lisas, he ex­plained, was de­signed to process ap­prox­i­mate­ly four bil­lion cu­bic feet of gas per day. Cur­rent out­put is clos­er to 40 per cent of that ca­pac­i­ty, lim­it­ing the coun­try’s abil­i­ty to pro­duce the lev­el of petro­chem­i­cals re­quired to sus­tain for­eign ex­change earn­ings.

Al­so com­ment­ing on the sit­u­a­tion, the T&T Cham­ber of In­dus­try and Com­merce high­light­ed that the sit­u­a­tion in Venezuela is evolv­ing rapid­ly and that it con­tin­ues to mon­i­tor de­vel­op­ments along­side feed­back from mem­bers on any dis­rup­tion to com­mer­cial ac­tiv­i­ty.

Chair­man of the Con­fed­er­a­tion of Re­gion­al Busi­ness Cham­bers, Vivek Char­ran, not­ed that any po­lit­i­cal tran­si­tion must place safe­ty, dig­ni­ty and sta­bil­i­ty for or­di­nary cit­i­zens at the fore­front.

Char­ran al­so high­light­ed the deep so­cial and eco­nom­ic links be­tween the two coun­tries, point­ing to the con­tri­bu­tion of Venezue­lans who live and work in T&T. A sta­ble and pros­per­ous Venezuela, he ob­served, would de­liv­er wider ben­e­fits to the Caribbean through im­proved trade flows, stronger en­er­gy co­op­er­a­tion and en­hanced in­vestor con­fi­dence.

The busi­ness com­mu­ni­ty’s pri­or­i­ties, Char­ran said, re­main peace, re­gion­al sta­bil­i­ty and eco­nom­ic re­cov­ery. While cau­tious op­ti­mism ex­ists, he sig­nalled a con­tin­ued com­mit­ment to con­struc­tive re­gion­al en­gage­ment.

The po­ten­tial im­pact on en­er­gy mar­kets was ad­dressed by Reval Chat­ter­goon, pres­i­dent of the Own­er Deal­ers As­so­ci­a­tion, who cau­tioned against draw­ing ear­ly con­clu­sions about how de­vel­op­ments in Venezuela might in­flu­ence glob­al oil prices.

Oil prices, Chat­ter­goon ex­plained, are shaped by sup­ply and de­mand dy­nam­ics, mak­ing near-term pro­jec­tions spec­u­la­tive. Sig­nals from the Unit­ed States point­ing to in­creased pro­duc­tion and greater in­vest­ment in Venezuela could im­ply high­er out­put, a fac­tor that may ex­ert down­ward pres­sure on prices.

Low­er oil prices, he not­ed, would car­ry im­pli­ca­tions for T&T’s fis­cal po­si­tion. Re­duced en­er­gy rev­enues could widen the deficit and con­strain gov­ern­ment spend­ing, though the scale and tim­ing of any im­pact re­main un­cer­tain.

Chat­ter­goon al­so char­ac­terised the cur­rent pe­ri­od as an un­prece­dent­ed one for this coun­try, giv­en the evolv­ing re­la­tion­ship be­tween Venezuela and the Unit­ed States and the lack of clar­i­ty over how quick­ly gov­er­nance and con­trol is­sues in Venezuela might be re­solved.