FOREIGN exchange fluctuations were among the causes of a $33.2 million difference between payments made by oil and gas companies and the revenue received by the Government.
That was one of the findings of the Trinidad and Tobago Extractive Industries Transparency Initiative’s (TTEITI) State of the Extractive Sectors Report 2022.
“The reasons for the differences were foreign exchange fluctuations, timing differences and unidentified differences. Importantly, there was only $4,167 in unidentified differences, meaning all but this amount of revenue could be accounted for,” said Minister of Energy Stuart Young at the launch of the report yesterday.
Young noted:
1. Between 2021 and 2022, royalties and Government’s share of profit from production sharing contracts cumulatively increased by 205 per cent. Royalties increased by 127 per cent from $1.7 billion in 2021 to $3.8 billion in 2022. The share of profit the country earned from production sharing contracts increased by 254 per cent from $2.7 billion in 2021 to $9.6 billion in 2022;
2. As a result of successful negotiations by the Government since 2018, T&T has earned $11.4 billion dollars in energy revenue from 2018 to the third quarter of 2022.
According to the report, the five highest taxpayers over the two-year period, 2019 to 2021, were bpTT at $4.6 billion, the National Gas Company at $3.5 billion, EOG Resources at $2.7 billion, BHP now Woodside at $1.7 billion and and Heritage Petroleum at $1.4 billion.
He noted that the report not only highlights payments but also acts a health check and provides the Government with recommendations on how to improve its revenue collection, data management and audit and assurance systems.
“These are recommendations we plan to implement in the short to medium term,” he said.
He observed that the country’s budget deficit is now 0.2 per cent of GDP.
“We know improved economic performance leads to more expectations from citizens. All citizens expect better when revenue increases, hoping to see the revenue working for them and improving their lives. These expectations reinforce the need for transparent and accountable management of the oil, gas and mining sectors,” he said.
“As we launch this State of the Extractive Sectors Report 2022, let us not lose sight that the billions of dollars from the oil and gas sector that we independently verify
in this report means more than numbers on a ledger.
“Money from the sector will help pay for the CDAP drugs for your grandmother or grandfather; it will fund national security initiatives to fight the scourge of crime and criminality; it will educate our children and will build infrastructure for our country
“So, I urge you to not look at these numbers in a vacuum. They mean a lot to citizens and will help transform lives. It is no secret that there is uncertainty ahead. The war in Ukraine will have short and medium-term impacts but we have to look at long-term structural changes to the industry as well. How will the energy transition impact future revenues or Government policies?” he said.
Young noted that the report takes an in-depth look at the environmental laws/regulations governing the extractive sector and that the TTEITI has developed an environmental reporting pilot project.
“I understand the NGC is the only company participating. And, the company will pioneer reporting on environmental indicators such as their emissions and energy use etc. When the pilot is completed, before the end of the year, the NGC would also be the first EITI reporting company in the world to disclose these indicators under the EITI framework. So, kudos to NGC and I am excited to see what story the data tells us in due course,” he said.
