In recent days the price of oil in world markets has been pushed upwards by events such as the civil unrest in Libya and more recently the disastrous earthquake and tsunami and the consequent damage to nuclear power plants in Japan.
The surge in oil prices, however, is unlikely to lead to a boom in Trinidad and Tobago, where oil production is now down to less than 100,000 barrels a day.
This country’s economy is still heavily dependent on the energy sector, of course, but it is gas that has become more important as a source of revenue.
Trinidad and Tobago is the fifth-largest exporter of liquefied natural gas (LNG) in the world, and the single largest supplier of LNG to the United States.
But prospects for gas too are looking increasingly questionable after the relative lack of success of the latest round of bids from international energy companies.
The more accessible sources of gas and oil are already exhausted, or close to it, hence bids were invited last September for 11 deepwater blocks in the Atlantic. However, there were no bidders at all for eight of these blocks. Only companies which already own local assets put in bids for further investment, and no new international companies were willing to invest in exploration in Trinidad and Tobago’s deepwater sector.
However, there are other ways in which this country can still benefit from its investment in energy over the last several decades.
Last week the Prime Minister announced that the president of Ghana wants to conclude negotiations for a major energy deal involving the National Gas Company.
This is the culmination of a process begun in 2008, when a high-level Ghanaian delegation visited the Point Lisas Industrial Estate, a local success story which houses the world’s biggest ammonia plant and houses 103 industries connected to natural gas.
Ghana is seeking to replicate Point Lisas, but on a larger scale, since Ghana has more gas than this country.
The Ghanaians have been particularly impressed by the local-content strategy of the Trinidad and Tobago energy sector, which has ensured that citizens of this country were involved in the management of energy assets.
This technology transfer has served this country well as part of the move to a knowledge-based economy that has been promoted by successive governments in preparation for the day when the oil and gas run dry.
If the Ghanaian project comes off, it will be the first time this country has had the opportunity to share its expertise in this way—though individual local experts have been in demand in West Africa. The success of this means of capitalising on local human resources will augur well for the future of Trinidad and Tobago.