With a 15 per cent decline in oil revenue projected for 2025, the TT Extractive Industries Transparency Initiative (TTEITI) says the energy industry is at a crossroads.

Its State of the Extractive Sectors report 2024 said oil revenue is expected to decrease from the $16.709 billion generated in 2024 to $14.174 billion in 2025.

These projections are based on a decreased oil price assumption which will see the price per barrel dropping to US$77.80 from the 2024 price of US$85.

The report also noted a 33 per cent decline in royalties sourced from gas taxation.

“Royalties declined by 20.92 per cent, from TT$3.8 billion in 2022 to approximately TT$3 billion in 2023. For fiscal year 2024, the government has received around TT$2 billion in royalties, with the three largest contributors being bpTT, Heritage and Perenco, paying approximately TT$1 billion, TT$712 million and TT$128 million respectively.

“In quarter one of fiscal 2025, the government received TT $555 million in royalties with bpTT and Heritage, paying approximately TT$315 million and TT$165.5 million respectively.”

A 50 per cent decline in production-sharing contracts (PSCS) share of profit, which outline the various fees, levies and contributions that operators must pay to the government was also observed.

“From 2014-2024, the government collected TT$44.29 billion in PSC profit shares and paid TT$29 billion in taxes from these profits on behalf of PSC partners to the Board of Inland Revenue (BIR).

“Between fiscal year 2022 and fiscal year 2023, PSC profit shares declined by 12.5 per cent from TT$9.6 billion in 2022 to TT$8.4 billion in 2023.

“For fiscal year 2024, the profit share received was TT$4.4 billion, with Shell and NGC being the largest contributors paying TT$2.2 billion and TT$866.7 million respectively. In Q1 of fiscal 2025, the Government received TT $896 million in PSC share of profit with Shell, EOG Resources and NGC, paying approximately TT$471 million, TT$236 million and TT$177 million respectively.”

The effects of these declines are far-reaching, affecting key components of the economy especially foreign exchange.

UWI economist Dr Vaalmikki Arjoon explained this impact at the private-sector

session on forex matters at the TT Chamber of Industry and Commerce on February 17,

“Exports are what primarily bring foreign exchange into the country, and the bulk of our exports primarily come from the energy sector.

"Unfortunately, within the last decade, oil and gas production would have dropped by about 38 per cent and LNG (liquefied natural gas) production would have dropped by about 50 per cent.

“Naturally, that would have caused our current account to shrink. Our energy revenues would have fallen within that time by about 53 per cent and our current account would have taken a drastic hit."

As explained by the Central Bank, the current account shows flows of goods, services, primary income and secondary income between residents and non-residents.

“Between 2011 and 2015 the annual average of the current account