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Tuesday 21 May 2019
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Browne: Dragon deal is dead

Gas scarcity an issue

Former Minister in the Finance Ministry Mariano Browne. 
FILE PHOTO
Former Minister in the Finance Ministry Mariano Browne. FILE PHOTO

FORMER minister in the Ministry of Finance Mariano Browne said Finance Minister Colm Imbert in his mid-year budget review showed growth in monetary data but not necessarily in the real sector.

Speaking via a telephone interview, Browne said the real sector is the production of gas, oil and manufacturing. He added that with the situation worsening in Venezuela, the cross-border Dragon deal is dead in the water.

He pointed out that less cement being sold and less cars sold notwithstanding the buoyancy in the price. “There is a huge among of liquidity in the market.”

He said this was why bank profits and share prices had grown. “When you short of cash you borrow. There is nothing to celebrate in that.”

He also commented on BPTT and issues with Atlantic LNG Train One and stressed that no self-respecting company would start talking about Train One’s future if they were not concerned about the capacity to produce gas. “You cannot just ignore that and say it don’t count.”

Browne said there have been no real developments in alternative gas and the reason for the Dragon gas deal was the recognition of the shortage in supply. He reiterated that “Dragon is dead.” He said Imbert revising the gas price upwards to $3 was optimistic and he was glad for the optimism. He also said anyone would be happy with growth. “The reality is the future is uncertain.” Browne said the Heritage and Stabilisation Fund had performed well but it should have been $15 billion instead of six.

He also said while there was eight months import cover this was not translating to renewed or positive cash flow of forex which is critical to doing business. “I don’t the think minister answered all the questions.” Economist Subhas Ramkhelawan told Newsday he had difficulty interpreting much of what Imbert said regarding gas. He said it appeared there was some rationalisation of gas production and the minister seemed to have cleared up the matter of overall production following concerns about a shortage by a number of people.

He said another “big ticket item” was how the deficit was to be funded and whether the Heritage and Stabilisation Fund would be drawn down. “There is not sufficient clarification to comment until we can drill down in regards of what the numbers actually mean.”

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