S&P outlook for T&T affirmed - Energy Ministry
January 5, 2014: The Ministry of Energy and Energy Affairs has said that it is pleased with Standard and Poor's, the international rating agency, affirmation of this country's long and short term foreign and local currency credit ratings at 'A/A-1' and predicts growth of 2.6 percent this year.
A statement on Saturday from the Ministry said the Minister, Kevin Ramnarine indiated that he was very pleased with S&P's affirmation of Trinidad and Tobago’s foreign and local currency sovereign credit ratings as 'A/A-1'. The S&P report was published on December 24, 2013.
The Ministry statement noted that S&P’s positive economic assessment was based on a positive outlook for the national energy sector. The MEEA was pleased with the expectation by Standard and Poor’s of an average growth rate of 2.6 percent, which is underpinned by “recovering energy output” in 2014.
S&P's report's rationale was that: “We expect per capita GDP to rise by 2.6 percent in 2014 thanks to both recovering energy output and continued growth in the nonenergy sector. Our projections assume that the country's trend economic growth rate is likely 2.5 percent to 3 percent, with the caveat that projecting energy output and prices is inherently uncertain.”
The Ministry of Energy's statment indicated that "from late 2010 to 2013 the T&T energy sector experienced a series of planned maintenance events led by the country’s largest natural gas producer, BP. Minister Ramnarine has communicated that these maintenance events are now largely behind us and 2014 is expected to bethe best year for natural gas production since 2010."
The S&P report was also positive on this country's ability to attract new investment in its energy sector “... changes in tax and other policies in recent years have encouraged more activity in the energy sector, as we've seen in growing private-sector participation in recent onshore and offshore bidding rounds. As a result, official reserves of gas and oil--which had declined in recent years--may stabilize in the coming years.”
The report also noted that “The increase in exploration activities in the oil and gas sector in recent years should sustain energy production over the coming decade, contributing to economic growth.”
The Ministry said this view is consistent with the view of the Ministry's which has noted that there are currently eight drilling rigs operating in our waters. This compares to one rig operating in our waters in June 2010.
"Looking forward, the year 2014 is scheduled to be one of the busiest for the energy sector in over 30 years. Altogether there are 14 exploration wells carded to be drilled by various companies in 2014. This will undoubtedly contribute to new discoveries of hydrocarbons which will sustain the prosperity of Trinidad and Tobago into the future," the statement concluded.