Ministry Of Energy Concurs With Moody’s Assessment

“MINISTRY OF ENERGY CONCURS WITH MOODY’S ASSESSMENT THAT RENEWED INVESTMENT IN EXPLORATION WILL INVIGORATE THE ENERGY SECTOR”

The Ministry Of Energy and Energy Affairs (MEEA) has reviewed the latest assessment by Moody’s of the national economy and concurs with its conclusions regarding the energy sector. Moody’s re-affirmation of the country’s sovereign rating is predicated on “high income levels, driven by the large and diversified energy sector.” Based on its assessment of forecasted oil and natural gas production to the year 2025, the MEEA agrees that the energy sector will continue to provide the country with high income levels into the future.

Moody’s expectation of “renewed investment in exploration and commercialization activities, particularly upstream gas projects, to invigorate the energy sector…” is supported by the MEEA. Moody’s also noted that an upgrade of the country’s sovereign credit rating could result as a consequence of “increased foreign investment in oil/natural gas exploration and commercialization activity that substantially boosts hydrocarbon output.”

Energy Minister Kevin Ramnarine at a lecture delivered at the Arthur Lok Jack Graduate School of Business on April 12 2014 noted that in 2012 the energy sector recorded $US 2.3 billion in FDI which is the highest in the sector’s history. Figures for 2013 have not yet been released by the Central Bank. According to data collected by the MEEA, in 2014 the capital expenditure in the energy sector is forecasted to be $US 3.3 billion; in 2015 $US 3.2 billion; and in 2016 $US 3.0 billion.

The majority of this forecasted capital expenditure will be spent on the exploration and production of crude oil and natural gas. The companies with the largest capital outlays in this period (2014 to 2016) include BP, BG, BHP and Petrotrin.

Finally Moody’s observation that Trinidad and Tobago has thus far mitigated the impact of the Shale gas revolution by “progress in diversifying LNG exports to markets beyond the US” is also supported by data from the MEEA LNG division. The MEEA notes that Trinidad and Tobago’s LNG exports have been significantly diversified with 44% of exports going to South America; 29% to the Americas (United States, Dominican Republic and Puerto Rico); 15% to Europe; 10% to Asia and 2% to other countries.

In commenting on the April 14 2014 Moody’s report, Energy Minister Kevin Ramnarine noted that:

“Moody’s assessment paints an accurate picture of an energy sector which has demonstrated resilience in the face of external shocks and one where exploration and production activity has significantly rebounded. I expect the level of exploration and production activity to remain high for the remainder the decade given that we have signed twelve (12) production sharing contracts and three licenses for exploration and production in the last three years and more will be signed in 2014.”

MINISTRY OF ENERGY AND ENERGY AFFAIRS
TRINIDAD AND TOBAGO
April 27, 2014