Trinidad took decades to close oil loopholes

Jun 19, 2021 News

– Expert warns Guyana not to walk the same road

Kaieteur News – Even though Guyana’s CARICOM sister, Trinidad and Tobago, has been in the oil and gas industry for well over 100 years, its poor management and weakened institutional capacity that spans decades have thrown its economy into a state of ill health.

TT Energy Expert, Anthony Paul

The Government, led by Prime Minister, Dr. Keith Rowley, is struggling to repair the damage by embarking on a campaign of contract renegotiations, while its experienced industry stakeholders zero in on Guyana’s emerging oil wealth as a means of survival.
To ensure it does not find itself in the same predicament, Trinidad and Tobago’s energy expert, Anthony Paul, firmly asserts that Guyana needs to begin the critical groundwork now. The energy strategist made these and other remarks during one of his appearances on Kaieteur Radio’s Programme, ‘Guyana’s Oil and You.’
There, the transparency advocate noted that Trinidad and Tobago has been in trouble with the management of its gas resources for years. The problems have only been exacerbated since the COVID-19 pandemic.
“Trinidad offers a lot of lessons for Guyana because the country has been struggling with managing its Natural gas for some time now in terms of production. And in my view, it is something that requires good governance, strong institutional framework, good decision-making to correct…”
Further to this, the industry expert shared that Trinidad’s institutional capacity to govern the sector weakened considerably over the years, while noting that this even resulted in the late observation that there was a shortage in production.
In this regard, he said that production was falling by almost a billion cubic feet per day and very little revenue was going to the people. Paul said, too, that the country subsequently became aware of the fact that there was massive tax avoidance by the oil companies.
“That means that the gas was being sold but the benefit was not coming back to TT.”
Considering how weak the institutional capacity had gotten over time, as well as the significant effort it would take to correct this once and for all, Paul shared that the Government in 2018, moved to increase its royalty for Natural gas to a whopping 12 ½%.
By doing this, Paul said that millions of dollars Trinidad was losing over the years via tax avoidance by the oil majors started returning. He said too, that this loophole was able to be plugged by ensuring that legislation was put in place.
To ensure that Guyanese are not made to suffer the same way, Paul urged the authorities to ensure the relevant protective measures are in place.