Gov't, Opposition in blame game over energy sector losses

The United National Congress said it will not accept responsibility or allow the government to cast blame on its members for the National Gas Company’s $2.1 billion loss recorded for the financial year ending December 31, 2020, or any current problems facing the energy sector.

At a virtual press conference on Sunday, the Opposition responded to comments by Minister of Energy and Energy Industries Stuart Young last week, of “bad deals” made during the People's Partnership's term as the reason why the NGC has landed itself in a bad place today.

In June, the NGC said its financial performance was affected by $4.2 billion charges originating from onerous contracts, impairment of infrastructure, and claims.

At a post-Cabinet press briefing last Thursday, Young insisted the losses faced at NGC were a direct link to a contract signed just before the 2015 general election by the People’s Partnership.

In response, UNC Senator Wade Mark said NGC's challenges were a result of a gas deal agreed to by the Prime Minister and Young in Texas in 2019.

“You come to this country and to tell undisputed lies. When you know that you were responsible for what has happened in Houston, Texas, 2017. You agree upon a price of US$3.50 per MMBtu when NGC was only able to afford US$3.10; that is US$0.40 above what NGC could have afforded.”

He challenged Dr Rowley, “Was it a cabinet decision, or was it you, as the chairman of the energy subcommittee… The prime minister is the one responsible directly for the madness that has taken place at NGC, because of the miss-negotiations that took place in 2017, and those prices took effect in 2019.”

Former energy minister Kevin Ramnarine also criticised Young.

He said under the People’s Partnership NGC was paying far less for natural gas compared to the price in 2021.

In a three-part Facebook post, Ramnarine dismissed comments by Young that the Energy sector plummeted under the People's Partnership.

He said, “In September 2015 all four LNG trains were operational. Today Train 1 has been down for the last eight months. In September 2015 all twenty plants at Point Lisas were operational. Today the M1, Titan, Mittal and Yara plants are closed and others have closed and reopened but are limping.

“In September 2015, Petrotrin was fully operational as was the refinery. Today, the refinery has been closed going on three years and may never reopen.

“In 2015, natural gas production was 3.8 billion cubic feet per day. Today it is 2.8 billion cubic feet per day. A 26 per cent decline. In 2015 crude oil production averaged 78,360 barrels a day. In 2021 it has thus far averaged 58,431 barrels per day. A 25 per cent decline.

“From 2011-2015, the Ministry of Energy awarded 1.42 million hectares of new acreage for exploration. For the last six years, it has awarded no new acreage for exploration.

In 2015, rig days stood at 2765. In 2020 rig days dropped to 822. From 2011 to 2015 total rig days were 12,440. From 2016 to 2020 it declined to 7,658 or a decline of 38.4 per cent. So who decimated the energy sector ?”

Young, in his own Facebook post on Saturday, said he took time to explain, in irrefutable terms, what led to the losses at the NGC in its financial year ended December 31, 2020.

"I referred to documentation, including, warning letters addressed to former ministers of finance and energy and energy affairs , Larry Howai and Kevin Ramnarine.

"The record of facts shows very clearly that Ramnarine, and other UNC Cabinet Ministers, including, the minister of finance and the attorney general, were warned about certain matters, that if pursued would harm, not only NGC, but our national gas sector."

He said on September 4, 2015, (the last working day before a general election), and the day of the 2015 general election, public servants warned the then attorney general "against executing an opinion that would have put the final nail in the coffin.

"Ramnarine was at the forefront of this."

Young said the UNC and Ramnarine were miseading and attempting to distract the population from the facts.

"The UNC and Ramnarine have failed to address the issues that led to losses, claims against the NGC, and the decimation of the gas sector."

Among the issues, he said the Opposition failed to address were:

- the introduction of a “Green Field Gas Priority Policy” and the effects that this had, and would have had, on the energy sector. "This UNC policy would have led to billions of dollars of claims against NGC for which it would have had no defence. This UNC policy was to give limited gas to newer plants regardless of the contracts in place with all of the plants at Pt Lisas who had invested in TT for decades," Young said.

- the agreement to a contractual condition called “Debt Tail Buy Down”, which, he said, would have saddled the NGC, and country, with carrying the full cost of a plant of over USD$900 million without any recourse or security should NGC have to pay off the full debt for the plant.

"Again, Ramnarine and the UNC bound NGC and the country to these untenable conditions that would have destroyed our gas sector. Fortunately, we discovered them and re-negotiated same."

He also pointed to the alleged failure by the former administration to negotiate a single upstream gas supply contract for NGC to ensure future gas production and supply.

"This is what has led to the lower gas production and supply since 2014 to date. You do not negotiate new gas supply contracts today for tomorrow. It takes years to bring on significant gas production. The UNC did not negotiate anything to keep or increase our gas supply."

He also said the People's Partnership failed to negotiate claims for gas shortage.

"The PNM Government and NGC since September 2015 have had to deal with billions of dollars of claims for gas shortage which were caused by the UNC’s failures under Ramnarine and that vision less and energy ignorant Cabinet between 2010 and 2015.

"These are only a handful of the matters that led to the problems that we have been working night and day to rectify since September 2015. It is important to understand that in the energy sector you have to negotiate for the future and not wait until you have come to the end of contracts as the UNC did.

"I thought it necessary to draw these matters to the population’s attention as I continue to see a failed politician, and the UNC, try to re-write history, and mislead people, without addressing the issues that have been raised above and before," Young charged.