Address by the Hon. Patrick Manning

Speech February 17 2009

ADDRESS BY THE HONOURABLE PATRICK MANNING PRIME MINISTER OF THE REPUBLIC OF TRINIDAD AND TOBAGO AT A PRESENTATION BY REPSOL DURING THE VISIT OF THE KING AND QUEEN OF SPAIN HYATT REGENCY HOTEL

Mr. Chairman
Their Majesties King Juan Carlos 1 and Queen Sophia of Spain
(salutations to be provided by Ministry of Energy)
Members of the Media
Distinguished Ladies and Gentlemen

Introduction
I welcome the opportunity to address you on this very special occasion of a presentation by Repsol to an audience that includes the King and Queen of Spain, Their Majesties Juan Carlos 1 and Queen Sophia. Let me again, on behalf of the people of Trinidad and Tobago extend a very warm welcome to Their royal Highnesses on this historic visit to our country. It is the first by a Monarch of Spain to a country which belonged to the Spanish Crown for almost three hundred years. And indeed here we are now, standing on the waterfront of La Puerta de Espana, that enduring port, established by Spain in the process of colonization, part of our capital city to which it gave its name centuries ago. There is so much history in this moment.

Modern relations
Circumstances are of course today rather different from that early time. Much historical water has flowed under the proverbial bridge; and today, the Kingdom of Spain and the Republic of Trinidad and Tobago stand together, side by side, as equal partners among the international community of nations; pursuing agendas that contribute both to individual development as well as global security and stability.
Co-operation in our mutual interest has also increased in modern times. We had the visit to Trinidad and Tobago of Prime Minister Jose Maria Aznar in July 1999, another first, during which bi-lateral agreements were signed to strengthen the modern ties between our two nations. Most significantly, trade and investment have increased between Spain and Trinidad and Tobago. Presently for example, Spain is the second largest market, after the United States of America, for Trinidad and Tobago's LNG, accounting for 30% of our exports of this product. We expect our commercial relations to grow, particularly after we, along with the international community, have overcome the spreading recession that has already engulfed leading industrialized nations of the world.

Repsol in Trinidad and Tobago
The Government is very pleased to have the participation of Repsol in our country's economy. There is no doubt that this company will continue to play an important role in the economic partnership between Spain and Trinidad and Tobago. Indeed Repsol is already a very significant player here. It participates with bpTT, BG Trinidad and Tobago and other companies in Trinidad and Tobago's Atlantic LNG liquefaction plant. This complex currently has four natural gas trains in operation, with a total capacity of 15 million tons per year.

Repsol holds a 30% stake in Train 1, a 25% stake in Trains 2 and 3, and just over 22% in the fourth Train. Train 4, has a production capacity of 5.2 million tons per year and is one of the largest facilities of its kind in the world.

Repsol also holds majority interest in our marine fields Teak, Samaan and Poui. Its exploration activities have led to the identification of 14 new prospects in the development of these fields and reserves of 40 million barrels of oil. It is clear that the prospects for a continuing strong partnership are well laid between Repsol and Trinidad and Tobago.

The energy sector in Trinidad and Tobago
Your Majesties, Ladies and Gentlemen, though a small nation, we have an impressive history and significant experience in the energy sector. Indeed, last year, we celebrated 100 years of commercial oil production in this country. The prospects for this sector continue to be very bright in Trinidad and Tobago. Our current reserves are 600 million barrels of crude oil proven and 34 trillion cubic feet of natural gas. Though modest compared to the reserves of larger countries, we have been able to attract a high level of interest from a host of multinational companies. The catalyst for this interest has been the deliberate policy intention of the Government to develop a gas-based industry and the transmission of this intent to the international business community.

It is an interesting story. After years of flaring, the decade of the 1950's proved to be a turning point in the utilization of natural gas in this country, when we began the use of this precious resource for the generation of electricity. Following this, the discovery of significant reserves during exploration activities in the late sixties and during the seventies, formed the genesis of plans for the development of the natural gas sector.

In the early seventies, policies began to emerge that favoured natural gas as a premium energy resource and as a potential generator of foreign exchange. Indeed, this signaled the beginnings of a change in the approach of the Government. As the oil sector started showing signs of decline, there was now increased debate regarding the monetization of natural gas, to help offset the fall in national revenue. Indeed government policy eventually saw national development as being inextricably tied to the definition of the country's gas reserves and the timely production and efficient utilization of these resources.

The result of this approach saw the State participating as an equity investor either on its own or on a joint venture basis in the first round of expansion of the sub-sector started in the 1980's. Indeed the Government of Trinidad and Tobago was the principal source of equity in plants for ammonia, methanol, and steel. Then with the modernization of our economy and divestment of much of the Government's equity interests in the nineties, the beginnings of the modern and unprecedented wave of foreign investment began. As the 1990's progressed into the news century the country saw the "second round " of expansion through foreign direct investment in ammonia, methanol, and most importantly, the production of Liquified Natural Gas for the first time in Trinidad and Tobago.

The production of LNG marked a major change in the utilization of our natural gas reserves. It ended the debate on monetization. And how well has our country been served by that decision which has generated great revenue for the social and economic development of Trinidad and Tobago for more than a decade already; and which is providing remarkable sustenance in these difficult times. We are now still the only exporter of LNG in the Western Hemisphere.

At the same time we have also grown to become the world's leading exporter of ammonia and methanol as well as a major exporter of Direct Reduced Iron. We now have a very impressive inventory of gas based industries operating in Trinidad and Tobago today. We have four LNG plants, ten ammonia plants, seven methanol plants, four iron and steel mills, four power generation plants, one urea plant, one natural gas liquids Processing Facility and one crude oil refinery.

This has been the result of clear strategic interventions by the Government that included judicious injections of public equity to ensure that the benefits of the resource accrue to national stakeholders. In the implementation of plans consistent with the stated policy goals, the Government of Trinidad and Tobago has also taken initiatives to achieve the following:

• The promotion of exploration and development activities in existing fields;
• An opening up of new acreage for exploration, with a view to increasing the reserve base;
• The further development of gas transmission systems and ports;
• The application of appropriate incentives to stimulate investment;
• A review of reserve and production levels, and the implementation of appropriate reserve depletion policies in the light of the goal of maximising returns in a sustainable development environment;
• An evaluation of upstream and downstream options for optimal energy sector growth and development; and
• Establishment and strengthening of administrative facilities.

The economy of Trinidad and Tobago
Your Majesties, Ladies and Gentlemen, the policies, programmes and activities in the energy sector are supported by a modernized economy in Trinidad and Tobago, one that supports private enterprise, local and foreign, through policies for increased trade and investment flows as well as through liberalized telecommunications and financial sectors. We have been careful to insert our economy into the global mainstream very effectively. We are also presently embarked on an intense programme of economic diversification for the sustainable development of our country. This includes policies for greater growth in manufacturing, agriculture and agro processing, information industries, entertainment and small and medium enterprises among others.

Our policies have brought great success. The economy of Trinidad and Tobago has been growing at an average of 8.3 percent since 2001,having doubled in size within that period and with over six billion US dollars in foreign direct investment flowing into the country. We have already achieved full employment, with the level of unemployment at 4.5 % at the end of 2007, the lowest since the attainment of our country's independence. Our foreign reserves continue to be strong and our savings have grown in our Heritage and Stabilisation Fund which now stands at $2.8 billion US, translating into a country with considerable savings.

Most importantly, our prosperity has percolated to all levels of the society. We have had an over one hundred percent increase in per capita income and we have reduced poverty levels by half in our country, from 35 percent in 1990 to 16.7 percent.

Towards the future
Based on our achievements and our potential, we now pursue, with confidence and determination, the goal of transforming Trinidad and Tobago into a developed nation by the year 2020. This plan is based on five development priorities: developing innovative people, nurturing a caring society, governing effectively, enabling competitive businesses and investing in a sound infrastructure and environment. And undoubtedly, one of the key elements for the attainment of this objective is the utilization of revenues earned from the exploitation of the country's hydrocarbon resources in a manner which supports overall national development.

With this in mind the Government has clearly outlined its future objectives in the energy sector and the strategies for their achievement. Some of the key initiatives include:

1.Upstream acitivity
The offering of acreage at regular intervals as well as streamlining and improving the bidding process cycle time. This is being done to ensure that reserve replacement occurs in a manner that supports the overarching development objectives of the Government.

2.Downstream initiatives
Development of approved projects is proceeding in strategic areas, including plastics, preservatives, aluminum and iron and steel, and the review of proposals for new projects is ongoing. Infrastructure to support these projects, including the establishment of new ports and industrial estates, is also being developed to match the pace of industry expansion.

3.Investments in the LNG Value Chain The Government is reviewing the results of the Train X feasibility study. Once the gas reserve situation allows for further expansion, the Government already has a blueprint on how to proceed.

4.Local Value Added
Several initiatives are underway here, including review of the existing mechanisms. This area in particular holds significant opportunity for sustaining the country's development thrust and the appropriate strategies are being employed.

5.Oil and Gas Taxation Review
Maintenance of a competitive fiscal system that delivers value to both investors and the people of Trinidad and Tobago is absolutely critical. A review of the regime is in train and will be in place later this year.
All these initiatives are based on one major objective, namely, translating economic prosperity into social development and stability and increased opportunity for fulfillment for all citizens of our country. The Government of Trinidad and Tobago remains committed to an integrated and people-centered policy of social and economic development as we pursue our goal of attaining developed country status by the year 2020.

CONCLUSION
We know we will get there, notwithstanding the adverse effects on all countries of spreading global recessionary trends. We do not for one minute underestimate the seriousness of the present international situation and the great difficulties it has already inflicted on millions of people all over the world. Both Spain and Trinidad and Tobago are already affected. But we must each strengthen our resolve and remain in partnership for the betterment of our people. We must hold tight as we weather this storm together. The visit of Their Majesties will significantly serve the interests of both our nations in these rough times and as we intensify our relations for a brighter future.

On behalf of the citizens of Trinidad and Tobago, I express our deepest appreciation for the visit to our country of our very esteemed and distinguished visitors, King Juan Carlos 1 and Queen Sophia of Spain. We ask them to convey fraternal greetings to the people of Spain and express the hope that their visit with us would have provided fond and enduring memories.
Thank you very much, and best wishes to all.