PNM brought energy $$ to TT

ENERGY Minister Franklin Khan on Monday said the PNM has been successful in bringing back energy revenues to TT which were lost due to poor policy decisions by the former UNC-led People’s Partnership (PP) coalition government.

Khan said revenue from the energy sector is projected to contribute to 23 per cent of Government’s overall revenue compared to six per cent in 2016.

He identified an increase in upstream production in natural gas and a roll-back of over-generous fiscal allowances by the UNC as two contributors to this anticipated increase in revenue.

Khan said senators would be shocked to know that under the PP “there was one particular energy company in TT that was paying $0.15 per mcf (1,000 cubic feet) of (natural) gas.” He added that one mcf of gas is approximately worth US$3.00 ($20.36).

Khan also said 12.5 per cent royalty rate on gross income on energy companies on natural gas has resulted in revenues to Government of $400 million in 2016 and b $3.5 billion in 2019.

While the covid19 pandemic lowered this revenue to $2.5 billion this year, Khan said the revenue is forecast to reach $4.4 billion next year. Dismissing reiterated UNC allegations of secret gas deals agreed to when the Prime Minister visited Houston in 2019, Khan said the UNC conveniently misses the fact that Government sent delegations to meet with other energy companies in the Netherlands, Australia and the United Kingdom.

Khan said Government received $1 billion from BPTT in 2018. “These are not normal taxes. This is settlement of outstanding loopholes in the system which the company agreed to negotiate in good faith with the Government.” He also said the companies were not legally bound to make these payments.

Khan said Government received $1.9 billion from Shell in 2019 and $280 million from the company this year. He reiterated, “There was no contractual obligation to pay these monies.”

BPTT, Khan continued, will make a project payment of $1.7 billion to Government over the period 2020-2021. He also observed the UNC continues to display its inability to understand the natural gas value chain in TT. Khan told opposition senators, “For God’s sake. Sit down, listen and learn.”

He explained the chain consists of upstream producers, downstream producers and traders. “A chain is as strong as its weakest link.” Khan said a gas value chain committee, chaired by former finance minister Wendell Mottley, has been established to deal with those challenges.

Khan and National Security Minister Stuart Young are also members of this committee. He added the committee is advised by UK-based firm Gas Strategies who are regarded as global experts on matters pertaining to gas value chains. Khan also said UK-based legal firm Case and White has advised Government with respect to the structuring of energy contracts. Khan said Government will seek professional. scientific and expert advice before it takes a decision on any matter.