Contract reform: The Missing link in Trinidad and Tobago’s energy resurgence

THE EDITOR: At a recent post-cabinet media briefing, the Energy and Energy Industries Minister announced a notable increase in national oil and gas production, an encouraging signal for TT’s economic recovery.

He further indicated that Shell intends to ramp up operations in the Manatee field by ten per cent, citing its positive implications for revenue, foreign exchange, and investor confidence.

While these developments deserve recognition, the omission of any mention of legislative reform within the oil and gas sector raises a critical concern. Boosting production is one thing but creating the legal infrastructure to support long-term, transparent, and investor-ready growth is another. It is this gap that now demands urgent attention.

TT has long stood as a regional energy leader. But in an era where environmental, social and governance (ESG) principles, climate change, energy transition, and sustainable development define investor mandates, we risk falling behind. As the global energy landscape shifts, our outdated and fragmented legal and contractual framework places us at a disadvantage.

At the core of the issue is the absence of standardised oil, gas, and renewable energy contracts, a structural weakness that increases project risks, slows approvals, and diminishes TT’s competitive standing.

Lessons learnt from Guyana

Guyana’s recent legal disputes in its emerging energy sector offer valuable lessons. The government’s arbitration with the Lindsayca/CH4 consortium over delays and cost overruns in the US$759 million gas-to-energy project at Wales exposed contractual ambiguities that have serious financial implications.

Similarly, the termination of the Corentyne Block licence held by Frontera Energy and CGX Energy ignited concerns over regulatory enforcement and contractual clarity.

Although Guyana is new to the petroleum industry, these cases underscore the risks of unclear, inconsistent, or poorly structured agreements, risks that are magnified in TT due to the sheer volume of legacy contracts and operational complexity.

A legacy without a legal anchor

Our country’s oil and gas history is rich, marked by milestones such as the acquisition of Trinidad Leaseholds Ltd by Texaco, and the nationalisation of the refinery under Trintoc and later Petrotrin. Yet despite this legacy, our contracting framework remains a patchwork of production sharing contracts, licence agreements, and joint ventures, often inconsistent in structure, risk allocation, fiscal terms, and environmental standards.

This legal fragmentation has far-reaching consequence including but not limited to investor uncertainty and higher risk premiums; weakened state bargaining power; and prolonged project negotiations and delays in delivery.

Path forward: standardisation, clarity, confidence

Standardisation is not about rigidity, it is about clarity and consistency. Model contracts with built-in fiscal terms, stabilisation clauses, local content requirements, and decommissioning rules create a balanced, transparent playing field for all parties. Jurisdictions such as Norway, Colombia, and Ghana have successfully adopted model petroleum agreements and renewable energy PPAs to align contracts with policy goals and streamline project approvals. TT can and must do the same.

Such a framework would shorten negotiation and project timelines; promote transparency and public trust; and enable strategic planning in line with the energy transition.

Reform must be legislative

To be truly effective, contract reform must be grounded in law. TT should therefore modernise petroleum legislation to authorise the use of model contracts for upstream activities and enact a renewable energy act to introduce standardised PPAs and regulatory certainty.

Additionally, these reforms must reflect international best practices, incorporating dispute resolution mechanisms, investment protection clauses, and technology transfer provisions, especially in light of climate financing and evolving global ESG standards.

Conclusively, the real question is not whether we can standardise our energy contracts, but whether we will do so in time to preserve our position as a credible, competitive and future-ready energy hub. Contract clarity is no longer a legal luxury; it is an economic necessity.

If we are serious about building investor confidence and managing our resources sustainably, we must back production gains with strong, modern legal architecture.

VANNA JANKIEPERSAD

via e-mail