Energy Chamber chairman Eugene Tiah has said reforms of the industrial relations sector and education system are crucial to the survival of local energy service companies.
Tiah was addressing day one of the three-day Energy Conference hosted by the chamber at Hyatt Regency, Port of Spain.
He said the past few years have been challenging for the oil and gas industry, globally and locally, as significant declines at the end of 2018 and into early 2019 have “shaken confidence in a longer-term improvement in prices.”
“In response to weaker prices and projections of long-term downward pressure on oil prices, due in part to increasingly competitive renewable energy sources, oil and gas companies have continued their relentless drive for efficiency and competitive pricing from service companies and contractors,” Tiah said.
“This in turn has meant that service companies and contractors, who make up the majority of the Energy Chamber’s membership, have had to make serious and fundamental adjustments to the way in which they do business, just to be able to survive.”
“We need to have the right regulatory and policy environment to help our local service industry navigate these tricky waters.
Serious reforms to the industrial relations environment and the education system are crucial if we are to successfully make this transition.”
He said renewed focus should be on the development of deep water exploration and cited Exxon’s oil finds off the Guyana coast.
“We are seeing a very encouraging deepwater exploration campaign underway in Trinidad, led by BHP, but nothing quite matching the enormous success of Exxon in neighbouring Guyana.
Trinidad has the potential to develop a much more robust energy services sector, including developing deepwater expertise by playing the role as a hub for the regional energy services industry, providing expertise and capacity to French Guiana, Suriname, Guyana, Barbados, Grenada and potentially offshore Venezuela.”
“This should be a focus of national development and an important element in an overall export diversification thrust.”
He said the “hard choice” to close the Pointe-a-Pierre oil refinery had significantly impacted many chamber members as the refinery accounted for approximately 25 per cent of their sales.
“While the future of the refinery remains uncertain, I am sure that everybody hopes that we will find a suitable private-sector entity willing to take on the challenge, as has already happened with the gas-to-liquids plant.”
He said the chamber was renewing its call for a review of the supplemental petroleum taxation as this “severely inhibits” competitiveness in the oil sector. He said the other issue which has impacted the sector is the continued shortfall in gas production.