Apr 2015 Financial News

Howai: Mergers good for T&T economy

Apr 14, 2015

Finance Minister Larry Howai says international mergers will insulate the T&T economy from the backlash of falling energy prices.

He said it can no longer be business as usual for Government because of the decline in foreign revenue, so it is important to form sustainable mergers.

“Preliminary indications indicate that the first half of this year we shall run a deficit but it will be lower than originally forecasted and considerably better than our revised forecast, based on reduction of revenues consequent with the fall in energy prices,” he said.

The minister said with the expected lifting of sanctions against Iran and the continued build up of oil inventories in the United States, revenue and expenditure initiatives have to be fast tracked in the coming months to insulate the T&T economy against the effects of those changes. He said the chemical complex to be built at La Brea will make a positive contribution to that effort, providing a boost to the economy. 

“Foreign direct investigation from this project alone is US$850 million or TT$5.4 billion,” he said

During construction phase of the project, Howai said, 3,000 people will be employed and when the plant is fully operational, 184 people will get permanent well paying jobs.

“T&T is no stranger to large petrochemical concerns. Our petroleum industry and downstream activities are highly developed and recognised the world over. This DME plant will be the first of its kind here,” he said. 

“Its high oxygen content, lack of sulphur or other noxious compounds and ultra clean combustion make DME a versatile and promising solution in the mixture of clean renewable and low carbon fuel,” Howai added.

His Cabinet colleague, Energy Minister Kevin Ramnarine, commenting on the US$70 million acquisition of BG Group’s assets by Royal Dutch Shell, said that merger will offer opportunities for upstream industries.

“Shell has been looking for an upstream position in the exploration and production business. I think Shell brings advantages to T&T and one of these advantages is access to capital,” he said.

Ramnarine said he and a ministerial team will meet with Shell officials this week to discuss the company’s plans for T&T.

“Shell now has a dominant position in the LNG business in T&T,” he said.

Ramnarine said it might take about nine months for the deal to be finalized as regulatory issues have to be addressed.

Royal Dutch Shell and BG Group have key stakes in T&T's energy sector, with both companies holding significant shares in LNG export/producing company Atlantic in Point Fortin.

Source:
Radhica Sookraj
Trinidad Guardian
Tuesday April 14, 2015

http://www.guardian.co.tt/business/2015-04-14/mergers-good-tt-economy