BMI View: A recent stream of new investment into T&T’s struggling hydrocarbon sector supports our modestly more optimistic stance toward the country’s long-term oil and gas production potential. Indeed, while we stress that significant risk remain given a challenging below-ground picture, steps by the government to incentivise greater upstream activity imply potential for a brighter future for the oil and gas sector.
Efforts by the government of Trinidad and Tobago (T&T) to reinvigorate the country’s struggling oil and gas sector may be starting to pay off. In recent years, in an effort to garner investment, the government has taken aggressive steps to incentivise greater hydrocarbon exploration, including more attractive licensing terms and greater tax incentives. For example, the tax rate on deepwater was severely reduced (from 50% to 35%), and in the 2013/14 budget there were incentives to develop mature and new fields , including improved capital allowances to make various projects more economically viable (see here for full details).