BP, BHP heads warn: Challenges not over yet
BP Trinidad and Tobago (bpTT) Regional President Norman Christie is warning against complacency in navigating the economy through falling oil prices.
Delivering remarks at the opening ceremony of the Trinidad and Tobago Energy Conference 2017 hosted by the Energy Chamber of Trinidad of Tobago, Christie said winning in the evolving energy world will require courage, which would mean taking the ‘tough decisions” to improve productivity, eliminate waste and improve commercial arrangements within the sector.
Stressing that there was no better time to make these tough calls, the BP Regional President restated his earlier advice to not let an economic downturn go to waste.
“We have made painful decisions including a 15 percent reduction in our overall headcount and a 50 percent reduction in our expatriate workforce. And, our courageous decisions have not only been about reducing and stopping, they have also been about continuing.
For example, despite the economic downturn we spent over US$3 billion in capital expenditures in 2015 and 2016 combined. Further, we will spend another US$1.3 billion in 2017 if the environment remains conducive to investments. The US$2 billion Juniper project which will deliver first gas in the third quarter of this year demonstrates our commitment to investing through cycles.”
He further stated that bpTT was also being courageous in pausing unsanctioned investments while the Company awaits policy and commercial clarity.
“Angelin is one such project that we will sanction once there is clarity on policy and commercial matters such as price. Time is of the essence though, because the country needs this gas in early 2019. The good news is that we are now in active negotiations with the government and NGC to agree the terms necessary for sanction of Angelin. And, the government is treating this with urgency.”
He explained the danger of “misplaced optimism” and inaction and false hope caused by complacency.
“We can’t keep or revert to old habits and inefficient ways of working because we think price will bail us out. In this evolving energy world we have to act as if prices will be low for a very long time, because they very well could be.”
Christie also urged corporate Trinidad to strive to put the citizens first in instances of dislocation, to ensure that the vulnerable are not made to suffer.
Echoing the bpTT Regional President’s concerns over complacency, was BHP Billiton President and Energy Chamber Chairman Vincent Pereira who stressed that T&T’s challenges in the energy sector are far from over.
“With oil prices creeping back up there is a clear danger that some of us may mistakenly think that our challenges are over. I would caution against that. Sustainable solutions lie not in prediction but in preparation.
While prices are obviously very important, perhaps the bigger issue for Trinidad & Tobago is oil and gas production and gas production, in particular.
The shortfalls in gas production that have plagued Trinidad and Tobago since 2011 mean that our petrochemical plants and Atlantic are operating way below capacity. Average production of gas in 2016 was almost 24 percent below 2010’s production – our peak year.”
Pereira stated that the country was experiencing truly challenging times which require leadership to navigate uncertainty, also leadership to ensure a relentless focus is maintained on what matters most – the safety of our people.
“Nothing must get in the way of ensuring we do always what is morally right, allows us to truly operate with distinction and earn public trust – we must do all we do without hurting people,” he said.
Photo: BP Trinidad and Tobago Regional President Norman Christie, via Trinidad and Tobago Energy Conference 2017 hosted by the Energy Chamber of Trinidad of Tobago