Can Trinidad and Tobago Escape the Oil Trap?

Core Insights - Trinidad and Tobago is at a critical juncture as it faces declining oil reserves and must decide between invasive exploration practices and transitioning to alternative energy sources for economic diversification [1][2]. Industry Overview - Trinidad and Tobago has historically been the largest oil and natural gas producer in the Caribbean and ranks as the 17th-largest natural gas producer globally [3]. - The country is home to one of the largest natural gas processing facilities in the Western Hemisphere, with a processing capacity of nearly 2 billion cubic feet per day (bcf/d) [3]. - The upstream oil and gas market in Trinidad and Tobago is projected to grow at a CAGR of 4.4% from 2020 to 2030, with major companies like BP, Repsol, and Shell continuing operations in the region [3]. Recent Developments - The U.S. sanctions on Venezuela have negatively impacted Trinidad and Tobago's oil industry, particularly after the revocation of special licenses for gas fields in the maritime boundary between the two countries [4]. - A recent auction for deepwater oil and gas exploration blocks in Trinidad and Tobago saw limited interest, with only four out of 26 areas receiving bids [5]. - The government is encouraging increased natural gas output to enhance processing capacity and exports due to the lack of deepwater energy players in the region [5]. Strategic Partnerships - Trinidad and Tobago has entered into an agreement with Exxon Mobil to explore an area equivalent to seven ultra-deepwater blocks, which could potentially generate $21.7 billion if reserves are discovered [6]. - Exxon's renewed interest in Trinidad and Tobago follows its successful operations in Guyana, which has rapidly become a significant oil exporter in Latin America [6].