2012: A snapshot of energy sector activity

T&T’s energy sector is on the cusp of change and 2012 will be an eventful year as several important policy decisions will be made to help mould the industry’s future. There will be several developments to look out for including: the unveiling of the country’s first ever national energy policy, the results of the national oil audit, the final decision on the methanol to olefins and methanol to petrochemicals projects as well as the Cabinet-approved new deepwater bid round. This year will also see new developments in derivative melamine manufacturing to link the energy and manufacturing sectors, continued discourse on policy to promote renewable energy in the local energy matrix and promotion of energy efficiency. These developments have the potential to boost investment revenue for the country.  In the upstream sector in 2012, there will be between US$2.5 billion and $3.5 billion in upstream investment. Interestingly, rig activity, one of the major indicators of bouyancy in the upstream sector, has returned to pre-2008 recession levels.

There were 13 rigs (seven land and six marine) operating in January 2012-the highest recorded since June 2008 (See Figure 3). The jump in rig activity was as a result of two new rigs in use by Bayfield and Petrotrin. BPTT contracted the West Jaya rig for at least two years and will drill 17 wells—three in Immortelle, seven at Amherstia, five at Mahagony and two at Cassia. This year BGTT will also start work on the development of its Starfish acreage and start infill drilling on the Dolphin Field. In January 2012, there were six offshore rigs operating, the highest number since August 2008. Based on projections, six offshore rigs will be operating for the duration of 2012 with Bayfield carded to continue with its seven-well exploratory drilling campaign.   In 2012, there will be an estimated 15 exploratory wells drilled. While the upstream sector is buoyant, there is still a need for major projects in the downstream sector to take off. The AUM II and Carisal projects are shovel ready, but there are still investment decisions to be made. The AUM II project received a boost as the Environmental Management Authority (EMA) granted a certificate of environmental clearance for site preparation work.

During the construction phase, between 2,500 and 3,000 people will be employed and 450 permanent jobs when the complex is completed. Construction on T&T’s first melamine moulding compound plant is scheduled to begin before the end of Q2 2012 and the melamax plant will hopefully trigger activity in the local plastics manufacturing industry. Other downstream projects on the horizon include a proposed iron and steel complex at the Union Estate in La Brea.
Severstal—Russia’s second largest steel producer—signed a memorandum of understanding with Metaldom of the Dominican Republic, the National Gas Company, the National Energy Corporation and Neal and Massy Holdings for the project and are currently performing a feasibility study. The proposed US$600 million complex at La Brea will consist of an iron plant with capacity to produce 1.5 million tonnes a year and steel mill with a production capacity of 300,000 metric tonnes of steel billets a year.
The project will provide 3,500 jobs during construction and 400 permanent jobs. Negotiations will also commence in the near future with the consortium of Sabic and Sinopec for the establishment of methanol to petrochemical and methanol to olefins plant in T&T, a project with a US$5.7 billion capital investment. In other petrochemical developments, the production of petrochemicals continues to fluctuate as maintenance work and safety upgrades of natural gas production platforms affect natural gas supply. However, compared to December 2011, there was an improvement in ammonia and urea production in January 2012, while methanol continues to lag behind (See Figure 2). T&T has to make strides in moving further down the value chain by maximising opportunities in the downstream energy industry. The Energy Chamber is always willing to facilitate dialogue and encourage sustained investment in the country’s energy sector, downstream and upstream.

CSR corner

Corporate social responsibility (CSR) continues to be a focal point of the Energy Chamber’s core values with the belief that good governance practices lend to more resilient and competitive business organisations, people and communities. Every year the Energy Chamber’s CSR Leadership Awards pays homage to companies that have integrated sustainable CSR initiatives into their business operations. This year’s CSR champions were rewarded in five CSR related categories and two new awards were introduced for energy service exporters. This week we take a look at those finalists in the second CSR category: Sustainable supply chain (supplier/contractor).

1. Kimberly-Clark (Trinidad) Ltd—Sustainability 2015 Agenda (winner)
The objective of the sustainability 2015 agenda is to develop a sustainable supply chain management policy which can:
• Influence the safety and environmental standards of its customers
• Create with distributors a beneficial sales outlook
• Provide all business stakeholders/partners with ethical business procedures
• Continuously innovate practices

The occupational safety and hygiene policy, contractors’ participation in EHS training, certification training in safe management of electricity for employees and contractors and route to market innovation for major customers are some of the tools used to achieve these objectives. Through the sustainability 2015 agenda, Kimberly-Clark was able to gain commitment by contractors to ensure precautions are taken through Kimberly-Clark’s permit to work system; gain mandatory participation of contractors in the occupational safety and hygiene programme; annual self-assessments and global EHS assessments and engage in on-going employee training in various types of operational controls.

2. The Kenson Group: Sharing good practices
The other finalist in this category was the Kenson Group. Kenson has been able to positively influence the safety, environmental and ethical standards of its customers through in-house monthly HSE meetings, its customers’ ethical policies and standards and through the development of specific HSSE plans which are distributed to each client location.
The implementation of high safety and environmental standards form a large part of Kenson’s supply chain management practices. Kenson’s HSE management system has been built to STOW regulations and has recently been audited awaiting certification. To ensure that contractors adhere to high environmental standards, the company subjects all of its contractors to internal audits and reviews which are conducted to ensure compliance with Safe to Work (STOW) and EMA regulations.
The company also engages its contractors in anti-corruption policies and procedures and the use of innovative strategies.

ENERGY CHAMBER
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