Despite his emphasis that “collaboration with the Government and other stakeholders” was the key to unlocking the country’s energy potential, Shell TT’s country chairman Derek Hudson had sharp words for the government’s timeline to wrap up negotiations on Atlantic’s LNG Train One.
“It is no secret we are currently in negotiations with government on this issue and I was informed this morning again (in the Prime Minister’s speech) that I need to wrap this up by the end of (the first quarter) this year. These are complex negotiations because the implications on all sides are significantly far reaching.
So, while I would have liked to announce by now we have new arrangements in place we are working through to complexities to have this settled in the very near future— as I said, about two months away,” Hudson said during an address on Monday at the TT Energy Chamber’s 2019 Energy Conference at the Hyatt Regency Port of Spain.
The government had announced at the end of last year that it had concluded negotiations for Train One with BPTT, and as Rowley noted in his speech earlier on Monday at the opening of the conference, had also settled an agreement with the company for US$37 million in royalty gas claimed by the State.
He also once again mentioned the “ire” of those in the industry when, at last year’s Spotlight on Energy, he chastised energy companies for “enjoying the lion’s share of returns” from the sector, while the country benefitted minimally. Shell is the majority shareholder in Train One. The company is also the second biggest natural gas supplier in TT, with production from 2016 to 2018 increasing by 30 per cent, Hudson noted.
“Shell, and I personally, supports simple predictable situations that incentivises long-term sustainability for all partners. But I am making this point because none of these can be resolved without actually taking into account some of the discussions mentioned by the previous speakers – how we incorporate emotional intelligence into these conversations?
How do we look at the world? The future of the energy industry in TT remains in our ability to remain globally competitive in a scenario of changing industry and market dynamics. The maturity of our resource base is important and the external risks created by climate change, political instability, how you treat with partners, and how you train (the younger people).” Hudson said.
Approaching the unique challenges of now cannot be the same as it was in the past if the industry is to succeed, he said.
"Where are we today? Probably the same place we were ten years ago, arguing about fiscal incentives, where gas should be distributed petrochemicals or LNG… It’s not a straight and easy path. In fact, it’s (often) been horrendous,” he said.
The TT reality is on the cusp of change, he said, with continuing lower prices, geopolitical issues, climate change, and humanitarian crises, one now right on our doorstop, all of which could not have been predicted even two years ago. These risks were not cumulatively part of the industry’s existence, and now it’s imperative to figure out how best to deal.
“We see collaboration with Government and other stakeholders as the key to unlocking this country’s future potential, but then again ladies and gents we keep making this comment year in, year out and all of us must admit we do not have enough to show for it. When we are successful at it – and we must be because failure is not an option – only then we can lay claim to TT being a dream destination for investors and developers,” he said.