Like multi-national energy company bpTT, newly appointed chairman of the Energy Chamber, Eugene Tiah is calling for clarity of Government’s policy, to ensure growth both in the oil and gas sector.
Tiah, an industry player with some 31 years experience called for a more detailed and comprehensive consultation to find the right taxation regime, as he reflected on Government’s proposed 12.5 per cent royalty on all oil, natural gas and condensate produced locally. This tax measure is expected to come into effect on December 1, but concerns have been expressed from among key players in this sector about the lack of details. In his inaugural address to members, Tiah thanked his predecessor Vincent Pereira and commended him for taking the chamber through a difficult period for the past three years.
Reminding his audience of two key strategic imperatives of the chamber, one to ensure TT was an attractive investment destination, Tiah said, with US$10 billion committed to upstream gas over the next four to five years, they were making significant progress but there was still a lot of work to be done.
Tiah said, “The Government has outlined the desire for a new taxation regime for the upstream oil and gas industry in each of the last three annual budgets and there has been some engagement with the Ministry of Finance and the consultants hired through the IMF about these topics. But there is still a lack of final resolution and clarity about exactly what is intended.
“Detailed and comprehensive consultation with the industry is required to find the right taxation regime, which meets the principles outlined by the Minister of Finance in his presentation on Monday.”
He also called for a clear policy direction on the future of debt-riddled, State-owned Petrotrin. Imbert said the company had two large outstanding debts, totaling some US$12 billion that are due to mature in 2019 and 2022 respectively. Yet, the minister insisted, Petrotrin still had great potential with its excellent portfolio of land and marine acreage.
Tiah said, in the oil industry, the role of Petrotrin remained a crucial issue but there continued to be a lack of clear policy by Government on its future, beyond statements on the challenges faced, the need for restructuring and a new approach.
He said many of their companies rely upon Petrotrin for much of their business and the chamber is an important stakeholder in discussions about the future of the company and the traditional oil industry.
He also pointed out that in the LNG and petrochemical sectors, there were still many unresolved policy issues that required urgent attention.
In the upstream sector, he said, clarity and certainty were needed to encourage investment, including investment in upgrading existing facilities to improve efficiency.