Dr Terrence Farrell

put better plan in place: Dr Terrence Farrell

I watched two contrasting presentations this week. One was by the senior executive team of BP presenting its strategy to over 20,000 viewers worldwide. The other was the news conference hosted by the Prime Minister heralding the arrival of the BHP drillship headed to the Broadside prospect.

Under its new CEO, Bernard Looney, BP has determined that the global energy transition is not only real, but is accelerating.

Their projections show a sharp consistent fall in the proportion of energy demand supplied by oil and natural gas and an equally consistent rise in renewables and electricity under various scenarios—“Business as Usual”, “Rapid”, and “Net-Zero”.

The “Rapid” and “Net-Zero” scenarios allow the planet to achieve the IPCC climate change targets by 2050 or earlier.

Looney’s BP has fully embraced “Net-Zero” and he is pivoting the company from being an “international oil company” to an “integrated energy company”.

The strategy is bold, fraught with uncertainty, risky, but highly socially responsible. It seeks to create shareholder value while at the same time embracing instead of resisting the energy transition.

BP’s strategic pivot is fascinating for students of economic history as well as students of business. It is rare for an incumbent to disrupt its own business model.

Typically, disruption comes from start-ups and innovators. And there are several such in the energy business including Tesla, an electricity company which makes cars, and others in solar, wind, and other renewables, which are not yet household names.

BP is re-ordering its capital expenditure to favour investment in renewables and electricity as well as in digital businesses adjacent to its traditional oil and gas business.

It will continue to invest in traditional oil and gas business where its hub infrastructures and infill prospects exist. Trinidad and Tobago is lucky that BP’s activities here falls into that category for as long as we are cost-competitive.

Even as BP was charting and explaining in detailed high-quality presentations its strategy to embrace the energy transition, we were celebrating, not a successful exploration effort to bring near-term relief to our parlous revenues, but the start of an exploration effort to drill the deepest well ever in our 110 year history of oil exploration.

Deep-water exploration and production are marvels of technology and, at the same time, very risky. But the economics of deep water E&P has been adversely impacted by the shale revolution.

The finds have to be huge to be commercially viable in energy markets where prices (oil and gas) are likely to be lower for longer.

Guyana is fortunate in this regard. Its oil finds are huge. But, if the energy transition projections obtain, Guyana will have to produce quickly and sell cheaply to benefit from its enormous reserves.

What we heard from the coy, cautious BHP executives who chose their words carefully, is that if the drilling is commercially successful, it will be several years before it will impact our revenues here.

So, what was the point? It was to show that “the energy sector is alive”, though I am unclear who declared it to be dead! BP, the largest producer, still has Trinidad in its plans going forward.

Shell acquired British Gas and has recently given final investment decision (FID) to projects here, and it is the dominant shareholder in Atlantic LNG.

BHP has made substantial discoveries of gas in Leclerc, but is searching for a path to commercial viability for those reserves.

In my research on the Petrochemicals sector 18 months ago, I argued that it was then at a point of inflexion. Low prices for ammonia and methanol and high gas prices have tilted most of the plants at Point Lisas into “idle” states and, as I had suggested, those plants are destined to become swing producers or even mothballed as incremental investment goes to low gas price countries.

The energy sector is certainly not dead, but it does require a shift in policy that acknowledges the energy transition as well as the commercial realities facing both the upstream and downstream companies.

The overweening focus on maximising rents accruing to government and their rapid consumption are surely not good policy in these times, if they ever were. But more importantly, why is it that we cannot seem to devote the required attention and resources to the tasks of economic diversification and institutional transformation?

Those tasks are far, far more difficult than producing more oil and more gas, and just like investments in oil and gas, they will take many years to bear fruit! Surely it can’t be a case of bright spotlights on energy, but fitful, flickering flambeaux on diversification, as we blindly grope around for a strategy.

We have to be able to walk and chew gum at the same time.


It’s just possible that “consult” may prove as troublingly controversial as “summon”. Within fresh memory, both verbs figure in depicting encounters or exchanges between Prime Minister Keith Rowley and Police Commissioner Gary Griffith.

IT is curious to the point of being astounding that the Caribbean Examinations Council (CXC) could describe as a communications issue the matter which contributed to widespread reported discrepancies in the marking system for this year’s region-wide examinations.

Sir Ronald Sanders makes the point that Luis Almagro, Secretary-General of the Organisation of American States, has taken the decision to expend more of the Organisation’s severely limited funds on the employment of another high-priced consultant to investigate a matter which engages the attention of primarily the United States. This matter of the American obsession with Venezuela has been driven off its agenda by the upcoming election but appears to consume Almagro who will do anything to force himself onto the world stage and at the same time do the bidding of his masters.

Could Finance Minister Colm Imbert please speak a word to the Water and Sewerage Authority (WASA), on behalf of some of the residents in Mt Hope?

“Injustice anywhere is a threat to justice everywhere” stated the great Martin Luther King Jr. Thousands of cases are languishing in the court system for decades despite the degree of severity in such matters. It is therefore quite laughable for the judiciary of Trinidad and Tobago, to have as part of its vision, a statement that it “provides an accountable court system in which timeliness and efficiency are the hallmarks… attracting public trust and confidence.”

The Women’s League of the People’s National Movement has taken careful note of the Sunday Express’ exchange of PNM bashers, this time handing the baton to Dr Kirk Meighoo, another failed politician seeking any avenue to retain a semblance of relevance to the national community, and moreso to his handlers in the UNC.