7:00 AM April 16, 2019 Port of Spain – Trinidad attracts foreign investment of $70 million in energy exploration that is expected to arrest the decline in oil and gas production in the last decade. However, the twin island nation remains dependent on the energy sector for its exports and economic growth.
Trinidad energy industry remains the locomotive for economic growth. The energy sector generates more than 60% of exports revenues and 45% of its economic activities.
Over the years several governments have talked about diversifying the economy away from the energy sector but no tangible results are visible.
The twin island nation has tried to develop downstream energy businesses, tourism and real estate development in the last two decades with mixed results.
The need to diversify the economy away from the energy sector was in stark display when the economy contracted 3.2% in 2009 before rebounding in 2010 to 1.2% increase. However, the economic decline was the first since 1993.
Energy has played a key role in the development of Trinidad but the reserves of natural gas are on the decline and the oil drilling in the offshore locations has been on the wane.
According to the Geological Society of Trinidad and Tobago oil production peaked in 2007 at 145,000 barrels a day and steadily declined to 100,000 bpd. Natural gas production peaked at 4,000 millions of cubic feet a day and now struggles at 3,000 million cubic feet per day.
Natural gas reserves have declined in the last decade from 22 Trillion cubic feet to 14.5 trillion cubic feet.
The latest investment of $70 million investment from Canada based Niko Resources and UK based Centrica in partnership with the state-controlled Petrtrin is a welcome investment that has a potential to boost gas production in the next one year.
Trinidad exports peaked in 2019 at $15.9 billion and dropped 41% to $9.3 billion in 2020 and are estimated to recover to $12.3 billion.