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Tuesday, July 29 2014 @ 12:36 AM AST

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Billions in profits mean little if not reaching man on the street: PM

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Trinidad & Tobago production declining but crude oil exports increasing

Crude oil production continued to decline in 2013, albeit at a relatively slower rate, the Central Bank said in its Annual Economic Survey (AES) 2013 released Monday (July 21).

"The major reasons for the decline were maturing fields and rising upstream cost. Accordingly, the thrust to reverse the decline continued apace in 2013 as both local and international companies were invited to offer bids for acreages on land and offshore," the AES said. "Total production of crude oil in T&T was estimated at 29.6 million barrels in 2013, a decline of 1 per cent below production of 29.9 million barrels in 2012. In contrast, exports of crude oil increased by 19 per cent, reflective of the higher production levels from bpTT and new entrant, Trinity Exploration and Production Limited."

Elsewhere, the major oil producer in the country – state-owned Petrotrin – continued to focus on strategies aimed at arresting declining production levels in 2013, the survey said. The company focused on the increased use of new technology such as 3D seismic surveys, and the development of idle and undeveloped opportunities in the West and Southwest Soldado (SWS) and Jubilee fields, it said.

In addition, there were renewed efforts to rejuvenate mature fields at its Trinmar operations while intensifying efforts in existing drilling and workover programmes.

The Pointe-a-Pierre refinery was back to near full capacity by mid 2013. This resulted in higher throughput and the resumption of normal product sales. Though there was a week-long disruption of work in March due to industrial action, there was no significant decline in output, the AES said. As a result, refinery sales in 2013 rose by approximately 12.0 per cent, increasing from 42 million barrels in 2012 to 47 million barrels in 2013.

Natural gas rising

Turning to natural gas, supply and demand, the AES said total production of natural gas rose marginally to 4,144 million cubic feet per day, just about 0.3 per cent higher than output of 4,122 million cubic feet per day in 2012. In terms of demand, the return to normal operations of various petrochemical plants in late 2013 meant that consumption was about 1.2 per cent higher than the previous year.

Liquified natural gas producer Atlantic continued to be the single largest user of natural gas accounting for approximately 57 per cent across all four trains, the AES said. The second largest users were the fertilizer plants at approximately 29 per cent, while the remaining 14 per cent was used in power generation, the manufacture of iron and steel and smaller consumers.

In 2013, total LNG production stood at 32.7 million cubic feet, just about 1.3 per cent above production in 2012.

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Beacon receives investment grade rating

Caribbean Information and Credit Rating Services Limited (CariCRIS), has assigned initial Issuer Ratings of CariBBB+ (Foreign and Local Currency) on its regional rating scale, and ttBBB+ on the T&T national scale to The Beacon Insurance Company Limited (Beacon). CariCRIS, the Caribbean regional credit rating agency, with shareholding by regional Central Banks, several major regional commercial banks, and CRISIL, an associate company of the globally recognized rating agency Standard & Poor’s, assigns independent ratings based on regionally relevant and objective risk assessment criteria.

The ratings of Beacon reflect the company’s good market position with a strong and diverse distribution network, good quality of financial assets and liquidity, and its diversified earnings, continued profitability and comfortable capital adequacy, CariCRIS said in a statement yesterday. These are further supported by adequate systems and risk management policies, CariCRIS said. "The rating strengths are tempered by the company’s smaller capital base relative to larger, regional competitors," CariCRIS said.

The ratings indicate that the level of creditworthiness of this obligor, adjudged in relation to other obligors in the Caribbean and within T&T is 'Adequate,' CariCRIS said. CariCRIS has also assigned Beacon a financial strength rating of CariBBB+ on the Caribbean regional rating scale, which indicates that the company’s relative ability to meet its ongoing insurance obligations is 'Adequate.'

CariCRIS Chief Executive Officer Wayne Dass congratulated Beacon's board and executive management "on their foresight demonstrated by accessing the rating and releasing it into the public domain." Dass said this "displayed progressive thinking on the part of the leadership, a willingness to be open and transparent to its customers, and a commitment to continuous improvement in its operations."