T&T’s Energy Horizon — Quicker Decisions, Greater Efficiency, Deeper Collaboration

February 12th, 2025

Over the last 167 years, since the drilling of its first oil well in 1857, Trinidad & Tobago’s (T&T’s) energy sector has grown, diversified, weathered booms and busts, traversed major crossroads along its developmental journey, and successfully negotiated several significant transitions.

In addition to producing about 59,000 barrels of oil per day (bopd), T&T produces and exports liquified natural gas (LNG), ammonia, melamine, methanol, urea, and urea ammonium nitrate (UAN). Multinational energy giants in T&T include BP, EOG Resources, KOCH Industries, Methanex Corporation, Mitsubishi Group, Nutrien, the Proman Group, Shell, and Woodside Energy (formerly BHP Petroleum).

New Discoveries and Investments Spark Optimism

Following several difficult years, 2024 and 2025 promise new growth for T&T’s energy sector. They herald a turnaround in exploration, major investment decisions, long-awaited project approvals, and significant new oil and gas discoveries—all cascading into a tremendous uptick in activity and optimism in the energy sector.

bpTT President David Campbell predicted the turnaround in June 2023 when he told members of the American Chamber of Commerce of T&T (AMCHAM T&T), “I am cautiously optimistic about Trinidad and Tobago’s energy future – and I want you to share in that optimism. We have proved resources that are well understood in the shallow water provinces and there are a number of world-class, motivated operators already investing to develop these resources into existing infrastructure. We have the deepwater areas that have ongoing appraisal activity after recent discoveries, and we are hopeful that even more deepwater acreage can be made available for exploration.”

An IMF Staff Statement released in April 2024 was also cautiously optimistic. It said:  “Real GDP is expected to expand by 2.4% in 2024, supported by the non-energy sector and new energy projects coming onstream — which will help offset the structural decline in energy production. Over the medium term, the delivery of several planned natural gas projects is expected to boost growth in the energy sector while supporting economic activity in the non-energy sector.”

It added that efforts to enhance the energy sector’s competitiveness and increase future natural gas production, such as restructuring the main liquefied natural gas facility, will bolster economic growth and fund the shift to a low-carbon economy. 

Various forecasters, including the International Energy Agency (IEA), predict weaker oil prices as global supply outstrips demand towards the end of the decade. Bloomberg’s May 2024 report headlined, “Oil’s Fragile Outlook Spells Weaker Prices in 2025,” explained, “Demand growth is set to cool and will be more than satisfied by a surge in supply environment, posing tough challenges for producers in the US shale patch and the OPEC+ bloc.”

In addition, the IEA noted that an unprecedented surge in new LNG projects coming online from 2025 is set to add more than 250 billion cubic metres per year (m³/year) of new capacity by 2030, equivalent to around 45% of today’s total global LNG supply.” This risks creating a supply glut, the IEA said. 

Striking a Balance: Green Energy Prospects

The IMF Staff Statement also highlights a crucial point: “However, it is important to strike a balance between leveraging the country’s maturing energy sector and providing conditions to foster growth of the non-energy sector. This will help shield the economy from global energy market volatility and green energy transition risks.”

Statista, a global data and business intelligence platform, said the renewable energy market is projected to reach US$2.15 trillion worldwide in 2025 as its long-term cost-effectiveness becomes increasingly feasible. “Increased use of technological advancements like automation, artificial intelligence, and blockchain will also increase renewable capacity deployment by decreasing costs and easing the integration of new energy infrastructure,” it said.

An Inter-American Development Bank (IDB) study in February 2024, “How New Technologies Are Transforming Energy in Latin America and the Caribbean,” underscored the need to decarbonise the value chain across energy generation, storage, and distribution and outlined some of the technology challenges, such as intermittency in generation with solar and wind, the high cost of hydrogen, and significant challenges in terms of energy storage and distribution.

Risks, Urgency, and Strategic Decisions

In a 2024 report, Norway-based Rystad Energy, a research and business intelligence company, said it expected the global market for oil and gas contractors to rise to a peak of US$1 trillion in 2025 and remain at high levels for several years. Helped by solid growth in the midstream part of the industry to liquefy, transport, and re-gasify natural gas, overall oil and gas spending will stay above US$920 billion annually on average for the 2022 to 2028 period.

On the risks to T&T’s energy sector, the IMF Staff Statement said: “In the near term, downside risks stem from external factors affecting energy markets (e.g., an abrupt global slowdown) and disappointments in domestic energy production (e.g., delays in new projects or unexpected disruptions in current production). In the medium term, the balance of risks is to the upside, stemming from additional new natural gas projects and the implementation of planned structural reforms, which could boost growth. Downside risks emanate from a faster-than-expected global transition to net-zero emissions, which could put pressure on the energy sector.”

T&T is once again at a critical crossroads, where its future prosperity hinges on its current decisions and the speed at which it implements them. In an article preceding the conference, “The Need for Speed,” Chamber President and CEO Dr Thackwray Driver said: “There is a lot of scope for partnerships between operators, and for partnerships between operators and service companies, that can improve the efficiency and speed of implementation.” 

Dr. Driver warned: “Given the maturity of Trinidad and Tobago’s oil, gas and petrochemical sector, there is a lot of pressure on the supply chain to be as efficient as possible and to cut unnecessary costs. The energy transition in progress means that international energy companies are being extremely disciplined about where they allocate capital, so it is important for a country like Trinidad and Tobago to always focus on efficiency and making it easy to do business.”

Empowering Growth and Energising Alliances

The growth of Guyana’s energy economy presents enormous opportunities for T&T businesses and service providers in the energy and non-energy sectors. At the Guyana Energy Conference and Supply Chain Expo in February 2024, His Excellency President Dr Mohamed Irfaan Ali said Guyana was building the infrastructure to provide a reliable and efficient energy supply and slash energy costs in half.

Energy Chamber of T&T Chairman Jerome Dookie also noted that decarbonisation and the renewables and energy efficiency industries will provide new business and investment opportunities for T&T’s smaller energy service companies. However, he stressed that “we need to have the right regulatory and policy environment in place.” 

The National Energy Corporation of T&T Limited (National Energy) has identified several investment opportunities linked to T&T’s target of 30% electricity from renewable sources by 2030. These include manufacturing solar and wind components, green hydrogen and chemicals, battery component assembly and manufacturing projects, and energy storage projects.

Today, amidst discoveries and investments, T&T’s energy sector stands poised for a resurgence. Challenges abound, yet opportunities beckon, particularly in technological advancements, deepwater prospects and green energy. With decisive action and strategic partnerships, T&T aims to harness its energy potential for sustainable growth and global competitiveness.

By Kay Baldeosingh-Arjune