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Energy Chamber sees positive signs
President of the Energy Chamber of T&T Roger Packer says the chamber sees “positive signs” of economic turnaround for T&T coming out of the incentives in the $61.3 billion 2013/2014 national budget. Packer, speaking at the chamber’s post-budget breakfast forum at Cara Suites Hotel, Claxton Bay, yesterday, said it was “very pleased with the outcome of the budget.”
In his review of the 2013/2014 fiscal package, Packer said the chamber was expecting that Finance Minister Larry Howai’s changes in the investment tax credit and the capital allowance would “see increased activity taking place in the energy sector.” He told members at the forum, with featured speaker Frank Look Kin, advisor to Energy Minister Kevin Ramnarine, that the chamber worked closely with Howai in the lead-up to Monday’s budget presentation and attended many meetings in which the chamber’s input was welcomed.
Howai, in his budget presentation on Monday, proposed allowing tax credits previously, only limited to the year in which an investment was made, to be carried forward to the next year, effective January 1. He offered capital incentives, including a new allowance of 100 per cent of exploration costs to be written off in the year the expenditure is incurred and to grant an allowance of 50 per cent in the first year of the expenditure.
He proposed an allowance of 30 per cent in the second year of the expenditure and an allowance of 20 per cent in the third year for plant, as well as machinery (tangible) and the drilling of wells (intangible) expenses. Packer added: “These incentives give benefits to both large and small companies.
“We at the Energy Chamber are hoping that people will take advantage of that and we will see a true turnaround, which is really our main goal and of course when we have that turnaround it is a lot more work for our members, service companies and contractors in the industry.” However, he said, there was need to balance the energy change from upstream to downstream.
“We are continuing to look at ways to make sure that all the players within the value chain are treated fairly. Therefore that encourages foreign investment into Trinidad so that we can stop the decline in our oil production,” he said. Packer noted recent trends, as announced by Ramnarine, that oil production had increased a bit from 81,000 barrels of oil a day to 83,000 barrels a day. He said based on initiatives that have been going on over the past few years declines in production were reducing.
He added: “We are hoping in 2014 that we can actually turn oil production upwards on the area of gas which still is a challenge for us. “We are pleased to hear that in 2014 we will return to normalcy where all of the plants—ammonia, methanol, LNG (Liquified Natural Gas,) all the different plants at Point Lisas—are running at full capacity which is very, very important to encourage invester confidence.”
Packer said: “We are seeing a lot of positive signs that we should return to being able to provide 100 per cent of the customer’s gas requirements.” He said the announcement of that 12 fields, which were recently given out, formed part of T&T’s reserves and “I think shows us that the future is bright and we need to be looking more at the positives than some of the negatives that we see in the press.”
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