Chester Sam­bra­no

News­gath­er­ing Ed­i­tor

chester.sam­bra­no@guardian.co.tt

For­mer min­is­ter in the Min­istry of Fi­nance, Mar­i­ano Browne, says he is not sur­prised by the an­nounce­ment that Trinidad and To­ba­go’s li­cence—grant­ed by the Unit­ed States Of­fice of For­eign As­sets Con­trol (OFAC)—to fa­cil­i­tate the ex­ploita­tion of gas fields in Venezue­lan wa­ters has been re­voked.

The rev­e­la­tion was made yes­ter­day by Prime Min­is­ter Stu­art Young dur­ing a news con­fer­ence at White­hall, ef­fec­tive­ly end­ing T&T’s abil­i­ty to com­plete both the Drag­on and Cocuina-Man­akin agree­ments.

Com­ment­ing on the mat­ter in the con­text of the goe­po­lit­i­cal sce­nario now play­ing out glob­al­ly af­ter US Pres­i­dent Don­ald Trump as­sumed of­fice, Browne said the de­vel­op­ment was ex­pect­ed.

“This was al­ways in the cards and a re­al prob­lem with Drag­on. It’s not the tech­ni­cal ca­pac­i­ty or fea­si­bil­i­ty—it’s the geopo­lit­i­cal risk. The ques­tion has al­ways been: how are we go­ing to op­er­ate this, giv­en Amer­i­ca’s an­i­mos­i­ty to­ward the ex­ist­ing regime in Venezuela?” Browne said.

As for the way for­ward, Browne not­ed that T&T has its own hy­dro­car­bon de­posits and re­sources. He al­so point­ed to some re­cent op­ti­mism from en­er­gy gi­ant BP.

“Now, the thing about it is that those are ini­tial un­der­tak­ings. We have to look at them in the con­text of the oth­er wells be­ing drilled,” he said.

Browne ex­plained that T&T re­quires an out­put of 4.4 bil­lion cu­bic feet of nat­ur­al gas per day, but cur­rent pro­duc­tion is about 40 per cent be­low that fig­ure.

“That means there must be sig­nif­i­cant ex­plo­ration and drilling to find and bring new wells in­to pro­duc­tion. And that has not been hap­pen­ing—not at the lev­el need­ed to main­tain out­put,” he said.

“That’s why Drag­on was im­por­tant—it was avail­able gas, un­der­utilised, es­sen­tial­ly free. But it came with geopo­lit­i­cal risks.”

Ac­cord­ing to Browne, this sit­u­a­tion high­lights the ur­gent need for fis­cal dis­ci­pline.

“We know what our rev­enue is. So, we must cut ex­pens­es to match that rev­enue. We sim­ply can­not con­tin­ue bor­row­ing in­def­i­nite­ly,” he said.

Econ­o­mist Dr Vaalmik­ki Ar­joon echoed Browne’s view that the re­vo­ca­tion of the Drag­on li­cence was not un­ex­pect­ed—but said it was nonethe­less un­for­tu­nate.

“It puts an­oth­er damper on our medi­um-term en­er­gy se­cu­ri­ty. In the past decade, nat­ur­al gas pro­duc­tion has fall­en by about 38 per cent due to fac­tors like ma­tur­ing reser­voirs, project de­lays, and slow­er-than-ex­pect­ed field de­vel­op­ment,” Ar­joon said.

He not­ed that the coun­try cur­rent­ly pro­duces be­tween 2.5 and 2.7 bil­lion stan­dard cu­bic feet (scf) of gas per day—well be­low the 3.5 to 4 bil­lion scf re­quired to meet do­mes­tic de­mand for At­lantic LNG, the Point Lisas in­dus­tries, and elec­tric­i­ty gen­er­a­tion.

“The Drag­on field has over 4.2 tril­lion cu­bic feet of gas and could have sup­plied 350 mil­lion scf per day at peak pro­duc­tion. So, with de­clin­ing lo­cal out­put, every gas source is im­por­tant,” Ar­joon said.

“En­er­gy con­tributes 30 to 40 per cent of our GDP and around 80 per cent of ex­port rev­enue. That’s crit­i­cal for for­eign ex­change.”

He em­pha­sised that the sit­u­a­tion high­lights T&T’s vul­ner­a­bil­i­ty to glob­al po­lit­i­cal and eco­nom­ic de­ci­sions.

“Go­ing for­ward, as we pur­sue cross-bor­der projects, we must al­so im­ple­ment proac­tive mea­sures to re­duce our re­liance and in­su­late our­selves from these un­cer­tain­ties,” he said.

Ar­joon rec­om­mend­ed im­prov­ing fis­cal terms to at­tract for­eign in­vest­ment, com­pet­i­tive bid rounds, and leas­ing small­er fields to lo­cal op­er­a­tors. He al­so stressed the need for reg­u­la­to­ry re­form.

“We need faster ap­provals, in­cen­tives for en­hanced re­cov­ery from de­clin­ing fields, and most im­por­tant­ly, we must re­move bar­ri­ers to do­ing busi­ness in the pri­vate sec­tor,” he said.

“This is vi­tal if we want to make non-en­er­gy sec­tors more ex­port-com­pet­i­tive. The cur­rent sit­u­a­tion shows the dan­gers of over-re­liance on the en­er­gy sec­tor—es­pe­cial­ly one that is so ex­posed to glob­al geopol­i­tics. That’s why a se­ri­ous di­ver­si­fi­ca­tion dri­ve is now more crit­i­cal than ever.”