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ENERGY PRIVATISATION...WHAT HAS IT ACHIEVED?

posted 15 Nov 2020, 22:53 by Gerry Kangalee   [ updated 20 Nov 2020, 12:03 ]
The various privatisation strategies in the local energy sector have all failed miserably to boost crude oil production. We must not forget that crude oil production reached its highest levels in the late 1970s. In 1977 229,041 barrels of oil per day were produced giving an annual output of 83.6 million barrels. In 1978 the daily production was 229,589 barrels giving a production for the year of $83.8 million barrels.

Lease operatorships, farmouts and joint ventures have not succeeded in lifting local oil production anywhere near the peak oil days of the late seventies.

What we are currently faced with is rapidly declining crude oil production, notwithstanding all the rhetoric about the “success” of Heritage Petroleum! In fact local crude oil production declined to 55,945.3 barrels per day (bopd) at the end of the second quarter of 2020 - the lowest crude oil production in Trinidad and Tobago for almost seventy years!

It is against this background we need to evaluate the Minister of Finance’s comments on Heritage’s performance and local crude production as a whole. Hear Imbert: “Heritage raised its average production rate to $34, 900 barrels per day (bopd) during the period October 2019 to September 2020.”

He goes on to say: “I am advised by the Minister of Energy that when production from the oil majors is added to that of Heritage Petroleum, the monthly rate of crude oil and condensate production has been rising steadily and is estimated to reach approximately $60,000 barrels per day in 2020 rising to 80,000 barrels per day in 2022.”

A report on Trinidad oil production 1970 – 2003 gives clear insight into how far we have regressed by 2020. It states: “Trinidad and Tobago’s oil output reached its highest ever – 229, 589 barrels per day in 1978, six years after production began from the prolific teak field (then Amoco’s; now BPTT’s) off the East Coast. This was quickly augmented by the Company’s Samaan and Poui fields. Crude production has since declined precipitously, with an estimated output of 137,187 b/d in 2001.” (ENERGY CARIBBEAN YEARBOOK 2003 PAGE 14).

What needs to be noted is that the lowest figure for oil production in 2001 is approximately 57,000 barrels greater than official actual and estimated figures for local crude production for 2020!

Clearly the Minister of Finance does not seem to understand that T&T has a history of oil production and this context needs to be used in charting any course for the future. Or, is he of the opinion that, we, the citizens, are totally ignorant of our history and, therefore, it is easy to deceive us.

But then how can we expect the Minister to admit that the result of the privatisation of the land-based oilfields has achieved its objective. Through the looting of the publicly-owned assets of a dying industry by the one percent, a clique of multi-multi-millionaires has been created. At the same time workers and citizens are thrown onto the scrap heap of unemployment, poverty and destitution. But that’s what the privatisation policy was meant to achieve, Wasn’t i?

(Economic Analysis unit of the Labour Advisory Bureau)
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