BP says that the shortage, which has negatively affected Atlantic LNG’s (ALNG) production and the Caribbean twin-island nation’s downstream sector, is a reflection of a lack of sufficient investments in the upstream sector.
“The issue is not whether there is enough gas, but rather whether Trinidad and Tobago has a robust energy policy or road map that focuses on the right structural and commercial terms to ensure it attracts the level of investment necessary to bring those resources into production,” BP said.
The company argued that the 2008 global economic crisis, an unfavorable fiscal environment, and the expectation by National Gas Co. and National Energy Co. that the oversupply of gas was likely due to the cancellation of downstream projects created uncertainty that invariably affected investment decisions.
BP said its heightened maintenance activity that took place following the Macondo disaster was necessary to ensure continued safe and reliable operations, and while it did contribute to the current gas curtailments it is not the primary factor.
The company said measures have been taken, however, to improve the attractiveness of investment in the sector—such as improved fiscal terms and more frequent bid rounds—and there is clear evidence that investment is returning. It will however take time to rebuild upstream capacity.
BP’s Trinidad and Tobago operation is the company’s largest being responsible for 18% of its global production. It also is the largest shareholder in ALNG, which is the largest exporter of LNG in the Western Hemisphere.
Trinidad and Tobago also is the largest exporter of methanol in the world and the largest exporter of ammonia and urea to the US.