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Indera Sagewan-Ali - ECONOMIST Dr Indera Sagewan-Ali admonished detractors to the billion-dollar deal officially struck between the TT government and ExxonMobil on August 12. She called for people in the TT’s energy industry to stop being sceptical.
“We need to stop nitpicking and start taking an eagle-eyed view of where the country needs to go.
"If we do that, we will be less critical and offer constructive criticism and comments that would support and push the agenda that is best for our country.”
She said with TT’s oil and gas resources dwindling because of excessive extraction from mature fields, access to more oil and gas was beneficial to TT, regardless of the deal the government made with Exxon.
“Anything is better than where we currently are,” she said. “While we do not know the details of this particular deal, I am of the strong view that whatever we get from it is better than zero, which is what we currently have.
She noted the benefits coming from the Exxon deal such as an initial $12 million in signing fees. The US$12 million in seismic studies and the US$21 billion that will be invested in exploration activities.
“That is money that we didn’t have before,” she said. “It would mean money coming into TT.
“At least some of it will be circulating here because we have the human capital that could benefit in that area. While certainly a lot of it will be expended on foreign contractors and consultants it will be economic activity happening in TT and therefore it will be beneficial.”
She noted that there were very few oil companies with the technology, capacity or finances to exploit the resources that could be found in the deepwater acreage.
As a result, she suspected that deepwater bid rounds would engage more attention with Exxon’s presence.
Sagewan-Ali: TT better at negotiating than Guyana
Speaking on concerns over the production-sharing split and royalties, Sagewan-Ali said she was confident that TT’s experience in dealing with oil and gas companies would have given the government an edge that the Guyanese government did not have.
“We didn’t get into this business yesterday as in the case of Guyana. We have been in the business of negotiating exploration arrangements for a very long time.
“We have to trust that we are a lot better at doing it than Guyana.
“It is a win for the current government,” she concluded.
“We must recognise that it was obviously in train, but I think the speed at which the government acted was highly commendable. It also speaks to the approach that this government is taking with respect to trying to monetise whatever oil and gas resources the country potentially still has. It shows that TT’s energy sector is once again really open for business.”
She also commended the government on their intentions for diversification, saying that it sets the government apart with regard to plans outside the energy sector.
"I have heard commentators who I respect criticise this deal and say things like 'this is the same as the PNM putting all its eggs in the dragon deal, but I disagree, because every time I hear the minister of energy speak you hear him talk about energy diversification. I don’t think we have ever heard these things spoken about by a government as we have been hearing in the last three months."
Chamber welcomes Exxon deal
In a statement on August 13, the Energy Chamber welcomed the signing of the contract.
“The consolidation of blocks TTDA 17, 18, 19, 20, 21, 22 and 23 into one block creates a unique opportunity,” the chamber said. Deepwater and ultra-deepwater exploration are inherently more risky and more expensive than onshore or shallow-water projects. Consolidation of the blocks removes risk in both exploration and development of the block as well as simplifies interaction with the Ministry of Energy.
The chamber also lauded the government on the speed at which it was able to complete the deal.
“We look forward to consideration of non-traditional ways to engage the private sector and attract operators. The chamber fully endorses the Prime Minister’s call for the creation of an attractive fiscal framework, the removal of administrative bottlenecks and the modernisation of the licensing and approval process and improving transparency in the process.”
English (US) ·