PM: Oil countries can benefit from T&T experience
Photo: Prime Minister Dr Rowley along with attendees at the first session of the Gas Exporting Countries Forum, held from November 13-14, 2018 in Port of Spain. Photo courtesy the Office of the Prime Minister of Trinidad and Tobago.
Prime Minister Dr Keith Rowley said oil-producing countries can benefit from Trinidad and Tobago's skills and expertise.
Speaking at the first session of the Gas Exporting Countries Forum (GECF) which is being hosted in Trinidad and Tobago from November 13-14, Dr Rowley said Trinidad and Tobago is not a newcomer to the oil and gas industry.
"The Caribbean region is becoming a hotbed for hydrocarbon exploration. Recent success in exploration in Guyana has prompted interest in Suriname, Cuba, Barbados, Grenada and Guyana."
"These countries can benefit from Trinidad’s experience in the hydrocarbon arena while providing opportunities for T&T in many aspects of the hydrocarbon value chain. However, there must be cooperation in areas of policy development, and the reconfiguration of energy systems to facilitate such agreements."
"The need for cooperation and collaboration extends beyond our region and applies to all of us on an international level. We are indeed fortunate to have an organization like the GECF to facilitate large-scale and international collaborative efforts. T&T, as a mature market participant, stands ready to assist market entrants and to pass on lessons learnt, as we are currently doing with countries such as Equatorial Guinea and Ghana in West Africa and Tanzania and Mozambique further to the east."
"As a country, we have a vast network of human resources, with knowledge in technical areas and in the development of marketing and pricing models, and policies. Conversely, we are open to learning from other member countries as we move forward," he said.
PM: Traders benefitting 'unfairly' in LNG market
Dr Rowley said Trinidad and Tobago is facing competition from the North American market and is suffering a 'leakage of value' of its products, which traders have been using to their advantage.
"As T&T gas products are pushed out of the North American market they will have to travel further to reach new markets, which will add to the complexity of supply logistics, increase costs and reduce our competitiveness.
"Pricing for LNG is not within the control of T&T but the value extracted for the benefit of the country ought to depend on the efficiency of the value chain and the cost of exploiting the gas. In petrochemical markets, feedstock and logistic costs are a key competitive advantage.
"Understanding the new sources of supply and their cost position is important in determining present and future competition and potential target markets. Notwithstanding any and all of this, Trinidad and Tobago remains an encouraging location for the modern gas industry of the commercial world.
"In addition to facing competition from a previous importer of our product, T&T is also suffering leakage of value of its products. Traders have begun using the system to their advantage.
"Through clever portfolio management, traders are able to benefit unfairly from our LNG production. As such, very little of the returns from high global LNG prices makes its way back to T&T. This cannot be allowed to continue and as such, the current system must be reviewed," he said.
Dr Rowley added however that the problem is not unique to Trinidad and Tobago and called on the GCEF to address the issue.
"I am sure that this problem of unfair benefit sharing is not unique to Trinidad and Tobago. There may be other countries among us who face this problem in one form or another. The GECF has a mandate to support the sovereign rights of its Member Countries over their natural gas resources and their ability to independently plan and manage the use of natural gas resources for the benefit of their people. As such, I would like to challenge the GECF to address this problem so that our people and others will no longer be deprived of their sovereign rights."
"The global gas industry as a whole has its own challenges to face and must meet certain requirements to ensure robust growth in the future. The three main pillars are cost competitiveness, security of supply and sustainability."
"As with any other industry or commodity, cost is a direct driver in decision-making. Natural gas must remain competitive with other fuel sources. For example, landed LNG costs must be reduced in order to compete with coal in Asia. This requires a multi-faceted approach, including technological innovation, process improvement and enhanced competition amongst suppliers," he said.
Dr Rowley also met with Ambassador of the Russian Federation to the Republic of Trinidad and Tobago, Alexander Kurmaz and other members of a Russian delegation after the conclusion of the first session.
Also present at the forum was Energy Minister Franklin Khan, Minister of National Security, Communications and Minister in the Office of the Prime Minister, Stuart Young and Anna Vasileva, Head International Projects Directorate at Rosneft Oil Company.
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