Trinidad & Tobago Government Wants to Increase Royalties
The Trinidad and Tobago government wants to renegotiate an increase in gas royalties with BP which would dramatically increase state revenues. Energy Minister Eric Williams said the country lost US $100 million in revenues as a result of a decision by the former government not to renegotiate a gas contract with BP. A committee has been set up to hold discussions with BP for a review of the natural gas royalty schedule. "This discussion has a real potential to increase the rent that is due to the citizenry and the nation," he told a cabinet meeting on Thursday. Williams said the arrangements arrived at with the company, then known as Amoco, were extended by the last government although an increase in royalty was due.
The existing rate is one and a half Trinidad and Tobago cents per 1,000 cubic feet of gas. Williams said the original agreement, which was abandoned, "suggested" that the increase should have gone to about ten percent of the price of gas, which averaged about US 9 cents per million cubic feet. "What we are faced with is increasing the rent for a depleting resource at the well head. We think it is not an unreasonable thing to do and the timing is more correct," Williams said. Prime Minister Patrick Manning said BP has been made aware of government's intentions and that the responses from them were "very positive."