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Tuesday 22 October 2019
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Business Day Editorial: Energy good news?

Photo courtesy Pixabay
Photo courtesy Pixabay

A few weeks ago, at the shallow water bid round announcements, Energy Minister Franklin Khan chastised the media about not reporting enough positive news in the energy sector.

Media outlets, he felt, did not celebrate the Ryder Scott audit enough, that TT’s natural gas reserves had increased 14 per cent, when previously they had been dropping. Meanwhile, plastered on front pages was news that BPTT had drilled four dry infill wells, possibly compromising the future of the Atlantic train one expansion project.

To be sure, Ryder Scott wasn’t front page news, but it was noted. In fact, the first articles on the findings were written in November and were based on a leaked copy of the report. Khan only brought it up again five months later in response to a question from the Opposition in the Senate, where he added that he couldn’t say more because of confidentiality.

Most questions – whether it is on gas sales agreement with Venezuela, multinational companies’ negotiations with the NGC or concrete plans for restructuring Petrotrin – are all guarded behind confidentiality agreements because of the competitive environment in which these companies operate.

This would be fine if a main party in these negotiations were not state enterprises. While government revenue and overall output from the energy sector are fairly transparent, the terms and conditions of these contracts are generally opaque.

That’s not the case in several countries with significant extractive industries. An article by the TT Extractive Industries Transparency Institute notes that around the world, either through specific legislation, the constitution or freedom of information, places like the Philippines, Colombia, Ghana and Azerbaijan require contract disclosure. Since Shell and BP operate in many of these jurisdictions, the concept would not be foreign to them. Even Guyana, in 2017, released its contract with Exxon Mobil, leading some to criticise if the government undersold itself. In TT, under the Petroleum Act, contract disclosure is prohibited. Citizens, then, cannot celebrate (or criticise) our wealth because we do not fully understand it.

Which brings us back to positive news. The Prime Minister and his delegation returned yesterday from high-powered meetings with top executives from the biggest multinationals operating in TT, including Shell, BP, EOG and BHP.

As far as the releases from the Office of the Prime Minister suggest, these meetings were all successful and the people of TT will benefit from stronger contracts. But there’s no way to corroborate this, is there?

The media’s job, Minister Khan should know by now, is not to just report the government’s PR. While we welcome these “positive developments” between the country and our biggest energy stakeholders, the media must critically analyse the context. These meetings come close on the heels of the news about Atlantic. It could be argued that deliberations with the government’s “empowered negotiating team” have been ongoing for some time, and these meetings would just be the culmination. It would be absurd to think, though, that the two majority shareholders in train one, Shell and BP, would have nothing to say about recent developments.

US president Donald Trump recently tweeted about the first LNG exports shipped from Louisiana. Trinidad was once the biggest exporter of LNG to the US. Now that country is no longer a market but a competitor. As the industry evolves this country’s first adopter status in LNG innovation means nothing if we cannot continue to find ways to be relevant. Khan wants positive news. He needs to start manoeuvring his ministry to create some.

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