Last week, the Energy Chamber hosted another successful annual Energy Conference. The theme was “Maximising Value through Collaboration” and in attendance were industry and government representatives, executives and thought leaders from across the local and regional energy sectors and academia.
The conference theme resonated with the T&T Extractive Industries Transparency Initiative Steering Committee and secretariat that have been promoting local and regional collaboration since T&T gained EITI membership in 2011.
The aim has been to promote best practice in natural resources management locally and across the wider Caribbean.
The TTEITI Caricom promotion began in 2011 with the inviting to its capacity-building workshops in Port-of-Spain participants from Suriname, Guyana, Barbados, Jamaica and the Bahamas.
It continued over the intervening years up to 2017 with TTEITI teams making multiple visits to Suriname, Guyana, Barbados and Jamaica to take the EITI message to their extractive sectors (oil, gas and mining) stakeholders (government, companies and civil society).
In order to deepen the regional collaboration, from time to time, Spanish-speaking participants were also invited from Peru, Colombia, Guatemala, Honduras and The Dominican Republic. In this endeavour, strong financial and technical support was received from the World Bank, IDB, EU, UK High Commission, Canadian High Commission and German Embassy.
Caricom outreach
Collaboration among Caricom countries across several sectors is acknowledged as one of the main benefits of membership of the regional organisation.
In some cases, collaboration is formal with ministerial oversight of sectors such as agriculture, education, health, security and justice, tourism, climate change etc.
In other areas, the collaboration is more informal eg in civil society matters. TTEITI, in recognition of T&T’s leadership role in the Caribbean, saw the need to share the benefits of EITI implementation with all Caricom countries rich in natural resources and that formed the basis of its original and ongoing outreach programme.
In recent years, T&T has been joined by Guyana, Suriname, Barbados, Grenada, St. Vincent and the Grenadines, Antigua, Jamaica and the Bahamas as new players in the region’s expanding energy sector (oil, gas and renewables) and the idea of expanding regional collaboration to a higher level is taking root.
The benefits of collaboration have been well demonstrated in the energy sector.
In the face of the international falling hydrocarbon commodity price environment, the local energy sector has recognised the benefits of company collaboration in their mutual interest. Today, companies that were formerly keen competitors are now working together as partners to implement some of the country’s most important projects.
Companies have recognised that, while they will continue to compete in many areas of their businesses, there are areas where they can collaborate to maximise value from their investments.
This includes collaboration between companies to undertake joint-operations so as to spread risks, share information, share the use of plant and equipment and service companies.
They are also collaborating across international borders to find optimum beneficial solutions to otherwise intractable problems such as what is currently taking place between T&T and Venezuela and a few companies that are working on both sides of the border.
Caricom collaboration
A view that is gaining support is that Caricom countries should view the hydrocarbon basin that extends from the Atlantic Ocean in the South, off the coast of Venezuela, through the Caribbean Sea to the Bahamas territorial waters in the North, as one economic zone that should be exploited for their mutual benefit. Such a vision could lead to collaboration between Caricom countries so as to ensure that the new energy sector players (governments and companies) do not have to re-invent the wheel by learning from T&T with its over 100 years of energy sector experience and so avoid most of the mistakes it made in its formative years.
The sharing of knowledge and experience could include areas such as the preparation of tender invitations for international bids for onshore and offshore acreages; contract and licence negotiations and regulations; maximising revenue returns and minimising environmental damage to protect tourism sites and fisheries resources; the refining of the extracted oil and gas; the creation of a single industry-wide service company health, safety and security (HSE) pre-qualification system; agreement on how to increase the levels of local content to ensure that more value is retained in each country; regional universities actions to award scholarships to train locals and to undertake industry-specific joint research on matters of regional relevance; the setting up of heritage and stabilisation funds; the management of the fuel subsidy; and the eventual establishment of downstream industries.
Win-win situation
Collaboration among Caricom countries will be a win-win situation for all.
The first benefit would be the avoidance of multinational companies playing off of one country against another through shared knowledge of negotiating strategies. Other benefits include working together to tackle tax payments avoidance and evasion practices such as transfer pricing and commodity trading issues.
The net effect of collaboration will be the maximising of revenue returns to all of the countries involved in the exploitation of their people’s natural resources to ensure that citizens enjoy a good living standard and that governments are well funded to engage in a wide range of sustainable development projects.
Caricom collaboration will not be a one-way street because, while Trinidad and Tobago has much to offer the new countries in respect of oil and gas exploration and marketing, some of newer countries have much to offer T&T in respect of renewable energy power generation project development.
EITI model
The annual EITI Reports provide citizens with detailed energy sector information that leads to greater transparency and accountability by government and companies that engage in the exploitation of the people’s natural resources.
The benefits have been recognised by Suriname and Guyana and they followed the T&T lead and became EITI members in May and October 2017 respectively.
Together these three countries form the nucleus of the Caricom EITI hub and are collaborating with the South and Central American EITI members of Peru, Colombia, Mexico, Guatemala, Honduras and The Dominican Republic to bring a strong Americas voice to the 51-country EITI international movement.
Without a doubt, Caricom energy sector collaboration is an idea whose time has come and the countries are well poised to take advantage of it if the political will is there.
Victor Hart, chair TTEITI steering committee, Member EITI International Board.