Ministry must get act together

THE Energy Ministry needs to get its act together and ensure international agencies get accurate information on oil and gas production when making their country assessments, economist Dr Roger Hosein has said.

“Providing this type of wrong data to agencies which provide forecasts for the world to see and on which huge investments may partly reside, is not acceptable, especially in an economy that has experienced average real economic growth for the period 2007 to 2017 of 0.1% and which is struggling with a host of other economic problems,” Hosein said.

This follows two releases from Finance Minister Colm Imbert, on Saturday and yesterday, in which he noted that one of the reasons for international credit rating agency Standard & Poor’s negative outlook was “inaccurate forecasts” from the Energy Ministry. Imbert said the data provided to S&P (and the International Monetary Fund, earlier this year), were based on 2017 estimates which bore no relationship to the actual production of gas in 2018.

“Because of inaccurate estimates of gas production… which bore no relationship to the actual production figures in 2018, the IMF’s current projections of economic growth for Trinidad and Tobago are lower,” Imbert said, adding that his ministry will correct the misinformation during Article IV consultations scheduled to take place within the next two months.

Newsday attempted to get a response to Imbert’s accusations from Energy Minister Franklin Khan, but calls to his mobile went to voicemail. The IMF in its World Economic Outlook earlier this month, had projected a miniscule 0.2 percent growth in the economy for 2018. Imbert said the latest data available to Finance indicates projected growth to be between 1.5 per cent and 1.8 per cent.

S&P’s estimate, in its report published last Friday, was 1.6 per cent. The agency also held the country’s credit rating stable, but said unless macroeconomic conditions improved, that could change in the next 12-24 months. Economic performance in 2017 improved, Imbert said, based on better than expected increases in natural gas production in the second half of the year.

“In the first half of 2017, gas production averaged 3.24 billion standard cubic feet a day, whereas in the second half of 2017, the average gas production increased to 3.49 billion standard cubic feet per day, an increase of eight per cent. In fact, in December 2017, gas production shot up to 3.82 billion standard cubic feet per day and went to 3.91 billion standard cubic feet in January 2018,” he said.

As a result, the estimate of -2.6 per cent growth in GDP given in the 2017 Review of the Economy, which was based on gas production from January to June 2017 is now being revised to closer to -1.0 per cent for 2017.

Yesterday, Newsday reported Imbert’s projection for gas output as an average of 3.8 billion cubic feet per day for 2018; four billion in 2019; and 4.1 billion in 2020, “based on discussion with Shell and BP,” two of the country’s biggest natural gas producers.