Time is of the essence, Prime Minister Dr Keith Rowley noted.
“Because our economies demand that whatever hydrocarbons might be out there, we need to know about it quickly and exploit it efficiently, effectively and sustainably as quickly as possible,” he said, as he signed the unitisation agreement between Trinidad and Tobago and Barbados. Both Rowley and Barbados Prime Minister Mia Mottley signed on behalf of their respective countries in Bridgetown, Barbados.
Rowley is in Barbados to attend the 31st Inter-Sessional Meeting of the Conference of Heads of Government of the Caribbean Community (Caricom).
Describing the agreement as a significant step forward between two “very friendly nations”, he said: “It means that as we proceed to explore for hydrocarbons in the geological formations offshore where our borders meet, we acknowledge that the geological history of the area recognises no borders between both Trinidad and Tobago and Barbados; and whatever exists might run across these borders, and in searching for it, we start with seismic surveys and those surveys are (to be) done without constraints by borders.”
“We are of the view that as we explore the territories we should be able to do so without scientific work being constrained by a line in the sea saying that this is Barbados and this is Trinidad and Tobago. However, if we do find hydrocarbons, as we anticipate that we would, given the geological prospects that we have been noting, it would be easier for us to able to explore, exploit, to produce and to market any such product, if we do it together. And that is why it is called a unitisation (agreement),” he said.
“If God smiles on us and we do find hydrocarbons- oil or gas, most likely gas; (it means) that we have now at this moment agreed to operate on a unitised basis and the two countries will work together, designate the operators for such a resource, and very quickly we can move towards its exploitation as long as what we have found is commercially viable,” Rowley stated.
He said the agreement means that the expertise from Trinidad and Tobago, the international companies that are now in Trinidad and Tobago and are not present in Barbados can very confidently proceed to explore and invest and whoever is on the Barbados acreage can do that same thing from the Barbados side. “Fortunately one of the companies operate in both Barbados and Trinidad and Tobago and that would make it even more attractive...Hopefully this would encourage exploration in the deep water where we are now looking for the bulk of our future resources...and we can monetise at the earliest possible date whatever we find on this acreage,” Rowley stated.
However, he noted, that the unitisation approach was something that could take a very long time. “So even after you find the resource the unitisation—the political agreement to exploit—can take a long time” he said.
He noted that 20 years after the discovery of the Loren-Manatee and other fields, T&T and Venezuela were working on this unitisation and then Venezuela faced US-imposed trade sanctions, so “after 20 years the Venezuelans cannot now move in the way that we were hoping”. So the two countries each agreed to exploit separately what is on their side.
Mottley: Kith and kin
Mottley said the agreement represented the deepening of the integration movement in which the countries are treating each other as “kith and kin”. She said when dealing with commercial risks, certainly is required. “We are now as two sovereign states giving all of the persons who would be seeking to exploit on either side of the line, the certainty that they need in order to be able to spend their money,” Mottley said.
“And it makes no sense us trying to do all of our things on our own and Trinidad and Tobago trying to do all of their things on their own...The essence of the integration movement is that we as sovereign states agree to treat each other better than we treat anyone else from outside of the region. Against that background it is unquestionable that Trinidad and Tobago has the deepest and longest experience in the oil/gas industry in the Caribbean community for over a century. And it is against that background that we recognise that within the context of what we have established as our jurisdiction, we want to share to cooperate,” she said.
Mottley said this unitisation agreement would allow the two countries to move forward “if we ever need to do individual unitisation agreements that would set out the commercial terms upon which we will share anything that is going to be exploited,” she said. She said for the purposes of seismic work, yesterday’s unitisation agreement was critical.
Mottley noted that Barbados would like to be able to see greater co-operation within the Revised Treaty of Chaguaramas on the areas of energy, be it fossil fuel, related energy or renewable energy as we face the existential threat of climate crisis. She said Trinidad and Tobago has always had the lead on the energy task force and Barbados was supportive of them retaining this position.
She noted there was now a situation in Caricom where Guyana had proven reserves of over eight billion barrels of oil, Grenada had a significant hydrocarbon discovery, Jamaica and the Bahamas were working offshore and Barbados had given up exploration licences on two blocks. She said Barbados had learned from Trinidad and Tobago and did not intend to put all its blocks up for exploration at once.
The Caricom conference takes place today and tomorrow.