Introduction
In an era of increasing geopolitical upheavals and economic volatility, energy security has become a non-negotiable priority for Caribbean nations. Recognising the importance of achieving this goal, Guyana, Trinidad and Tobago, and Suriname have stepped up to marry their respective strengths and produce a practical blueprint for energy independence.
Towards this end, the trio has signed several non-binding agreements over the years.
Following high-level discussions at the Suriname Energy Oil and Gas Summit (SEOGS) in June 2023, Suriname and Trinidad and Tobago signed an agreement to establish technical teams to produce feasibility studies on various energy-related issues.
Guyana and T&T also signed a similar pact in May 2022, building on another signed in January 2022 with Brazil and Suriname to explore the development of an energy corridor.
Their political will is also imbued with the efforts of CARICOM, which more than two decades ago endeavoured to have its 15 member states find common ground on devising a strategy for energy security. While CARICOM’s move has been sluggish, bearing little to no fruit, this in-depth report examines the potential of diplomatic commitments by Guyana, Suriname and Trinidad and Tobago to deliver concrete action.
Crude Realisations
Considering the sobering lessons of the COVID-19 pandemic and the Russia-Ukraine war, Trinidad and Tobago’s Ambassador to Guyana, Conrad Enill, says energy security for the region is not merely a “good sounding” attainable goal. He insists that it is a top priority for the region’s survival.
When the pandemic spread to the region in 2020, Enill said some CARICOM states faced difficulties procuring critical vaccines. This was because they needed more financial resources to do so. “They were simply overlooked for geopolitical and other reasons,” he said.
The Ambassador emphasised that the region’s vulnerability was brought to the forefront once more following Russia’s incursion into Ukraine in February 2022, leading to far-reaching consequences. This situation not only escalated oil prices to their zenith since 2014, surpassing US$100 a barrel, but also instigated fears of more severe supply disruptions for key commodities.
Enill said these shocks cemented in the minds of regional leaders that energy as well as food security must be attained. He noted that a Working Group, a product of the 2022 agreement between Guyana and Trinidad and Tobago, which he heads, has been established towards this end.
Enill also underscored Trinidad’s importance to any regional conversation on energy, stating that there is an agreement within CARICOM that Guyana would lead the region’s response on food security while Trinidad and Tobago would head up energy.
The Twin Island Republic has held the title of the region’s longest producer, having undertaken considerable oil and gas exploration activity on land and in shallow water more than a century ago. Its hydrocarbon sector has been gas-dominant since the early 1990s. Today, it remains the second largest LNG exporter in the Americas, having exported 6.5 million mt of LNG so far this year, according to S&P Global Commodity Insights data.
While Trinidad is home to some of the largest natural gas processing facilities in the Western Hemisphere as well as other key hydrocarbon infrastructure, Enill said the CARICOM member state has faced issues with production which has declined in recent years. This he said has left Trinidad with an over oversupply of human resource and infrastructural capacity which can no doubt be tapped by Guyana where an ExxonMobil-led consortium has unlocked over 11 billion barrels of oil equivalent resources in the country’s massive Stabroek Block. As a result of these resources, along with the fact that the Guyana Government has already sanctioned five projects targeting 3.4 billion barrels, Guyana is considered the world’s fastest growing economy. It is also aiming to produce over 1.2 million barrels a month by 2027.
Enill said Trinidad’s expertise can also be of significance to Suriname, which is now on the cusp of developing one of the largest oil projects in the Guyana-Suriname basin. French oil major, TotalEnergies made an announcement on September 13, 2023 that it is moving ahead with a US$9B project in Suriname’s Block 58 where close to 700 million barrels would be produced.
Prior to this major development, the Dutch-speaking country has been focused over the last 40 years on operating the Tambaredjo oilfield through its state-owned company, Staatsolie Maatschappij Suriname N.V. The Tambaredjo field located onshore Suriname produces around 16,000 barrels of oil which is processed by Staatsolie’s Tout Lui Faut refinery.
Given the resources in Guyana and Suriname and the infrastructure available in Trinidad, Enill expressed optimism that regional security is achievable, especially given the robust discussions stemming from the Working Group he heads between Guyana and T&T.
While key conversations are taking place, Enill said none have resulted in a timeframe being set for regional security to be achieved. At this point, Enill said leaders are still determining what responsibilities will be assigned to whom while technical teams still trying to outline the way forward.
Seeing Eye-to-Eye
For decades, many Caribbean nations have faced challenges in sourcing reliable, affordable, and sustainable energy. The challenge is one Suriname’s Foreign Affairs Minister, Albert Ramdin, said CARICOM must overcome for economic resilience to be realised. Ramdin said also that Guyana, Suriname and Trinidad and Tobago stand a good chance of leading a persuasive action plan in this regard.
“For that plan to work there need to be frequent meetings both at the political, diplomatic and technical levels,” Ramdin said. The minister said it is critical that leaders see eye-to-eye on crafting a long-term commitment. This, he said, requires information sharing among nations so that decisions on energy infrastructure can reflect a regional approach.
“Ultimately, it has been proven that working together, especially as small countries, pooling resources and political weight can only benefit all participants so I would say we need to start strategising and agreeing on concrete actions on the way forward,” Ramdin said.
With Guyana’s oil resources currently at 11 billion barrels of oil equivalent and Suriname set to produce 700 million barrels, Ramdin said there will be increased attention from global players.
“The enormous resources being unlocked will create new dynamics in terms of geopolitics and the relationship we have with the USA and Brazil,” Ramdin said, adding, “We have to be prepared to have that debate among ourselves on how to respond and build out that strategic policy that will provide services and support for the region.”
Big Players Matter
Director for Energy Practice at Miami-based Consultancy Group, Americas Market Intelligence (AMI), Arthur Deakin, agrees that the Guyana-Suriname basin will attract the attention of some of the world’s leading hydrocarbon exporters and refiners. He said this could provide key partnerships for Guyana, Suriname and Trinidad and Tobago to build a world-class petrochemicals industry that can benefit the region.
Deakin cautioned, however, that the extent to which the CARICOM trio is successful in devising a blueprint for energy security will hinge on moves made by key power players such as Russia, China, and India. He recalled that with one move, the region’s plans for energy security can be thrown for a loop as seen when Russia initiated an unprovoked war against Ukraine which sent prices spiraling upward for key commodities. Deakin said it is critical that any regional plan consider appropriate responses for several risks as well as factors that could leave nations with stranded assets.
“I think it will all come down to China,” Deakin said, which is considered to hold the key to global energy demand. “China has been doing a lot of good work in the energy transition arena and has the most investment in renewables,” the Energy Consultant said.
He also noted that China depends on coal and LNG imports for a lot of its power. He said regional leaders need to keep an eye on how effective China will be in leaning away from coal.
Overall, Deakin said the decisions to be made by China and other big energy players as well as the financing reforms to be undertaken by multinational corporations/lenders in the market will determine the extent to which the region is successful and how quickly it does that too.
An Unfair Price
Guyana’s Vice President and chief policy maker for the oil and gas sector also acknowledged the need for regional energy security but stressed that many CARICOM nations face four significant challenges that leave them at a disadvantage.
In CARICOM, the official said many countries have three painful situations to deal with: the devastation by weather-related events, fiscally stressed budgets, and massive debt overhang. “… It is not a good place to be,” the Vice President said.
He also acknowledged that Guyana has more scope for growth because of its diversified economy, which has traditional revenue earners like gold, bauxite, timber, and agriculture. Many CARICOM countries, in contrast, depend primarily on tourism.
For those CARICOM nations without independent oil and gas resources, he suggested that their answer may lie in renewables. “They may have to invest a lot in solar, for example,” the Guyanese official said, adding that these batteries are still expensive but, with tie-in systems, can reduce energy bills. “It is a bleak picture, but a one-size-fits-all approach cannot be taken,” the Vice President said. “It will have to be a blend of different solutions, and that is a work in progress,” the official said.
The Latin Connection
Energy Strategist Anthony Paul agrees that energy security is attainable for the region, especially since it has a surplus of renewable energy sources such as wind, hydropower and solar. Paul said CARICOM leaders must strive to devise a plan that seeks to harness those surpluses.
Paul said that the approach takes a careful balancing act and allows for a regional perspective on energy development. “Such an approach puts our people’s interest over that of the multinationals, and we don’t seem to get that balance right,” Paul said.
He also said that developing a common regional approach would benefit from ties with the Latin countries in the Caribbean Basin.
“CARICOM is not isolation but part of the Caribbean which includes Venezuela, Brazil, Columbia and Cuba. Because America ostracises Venezuela and Cuba, we tend to forget they are our neighbours,” Paul said.
“But we have to ask how we can work as a region in a way Europe has done with our Latin American partners to help achieve this goal in a shorter time.”
By expanding the pool of nations that can be tapped for crucial synergies, Paul said the region can achieve energy and economic security.
He also stressed that citizens should hold their governments accountable on their energy security plans and policies too. Paul said this means asking, for example, whether the specifications for energy-related facilities serve a domestic or regional purpose.
Paul noted, for example, that Guyana intends to build a refinery that can take off 30,000 barrels of oil per day. He said citizens could ask if that structure contemplates feeding into a Caribbean market or if it only serves Guyana’s own security needs. “We need to have a strategic approach that takes the region’s interest at heart and we also need to have people who are willing to take technical advice from their own people and not only the multinationals,” the Energy Strategist said.
CARICOM’s Efforts
The Caribbean Community has acknowledged the need for energy security for over two decades. However, the journey to a unified approach has been sluggish.
Dr. Devon Gardner, who serves as Head of Technical Programmes at the Caribbean Centre for Renewable Energy and Energy Efficiency (CREEE), and previously served at CARICOM’s Energy Unit, offered insights into this ongoing challenge.
He said CARICOM has several established mechanisms to assist member states in achieving their plans for energy security. However, from a regional perspective, progress is still slow since there is no obligation or requirement for this in the Revised Treaty of Chaguaramas (RTC).
Dr. Gardner also recalled that in 2003, regional leaders held critical discussions which recognised energy security as a community goal. This led to the creation of a CARICOM Energy Policy in 2013 and Caribbean Sustainable Energy Roadmap and Strategy. “The process took ten years because the energy needs of 15 member states would be different depending on the lens you are looking through,” Dr. Gardner said. He said the region is home to a mix of fossil fuel producers and importers. “Then there are those with natural gas, those in exploration, and those who don’t have anything to explore, so getting to a middle ground for a common energy policy was always a challenge…,” the CARICOM official said.
After expending ten years to find a middle ground, Dr. Gardner said not much was done to implement that document. Another decade later, those documents are rendered wholly inadequate for the changed times.
“Many things have changed, including Guyana’s position as a fossil fuel superpower within the region, the dwindling of Trinidad’s role in fossil fuel production, and the emergence and changing dynamics of markets for technologies that allow for the exploration and exploitation of renewable options for energy efficiency such as solar…,” the CARICOM official said.
Dr. Gardner said work is now in progress to revise the CARICOM Energy Strategy to reflect the new circumstances. He said this document should be available for debate by 2025.
In formulating such a strategy, Dr. Gardner said the region needs to develop a working definition of what energy security means in the current times. He said this also means agreeing on the right mix of conventional and renewable resources that would ensure energy independence and economic security.
Dr. Gardner also recommended analysing how the conventional resources of nations such as Guyana, Suriname and Trinidad can feed into the regional energy market. For the time being, he said there is no mechanism in place that provides preferential supplier arrangements for countries within the region ahead of those outside.
“…At the end of the day, countries are looking at economic development, and that often comes with getting the best bang for the buck and, in so doing, the poor cousin or the poor brother who cannot afford to pay the same price as the guys outside will suffer…,” Dr Gardner said.
He said this is where the political conversations are critical. Dr. Gardener said CARICOM and its institutions are just custodians of the process. “Since energy security is not one of the things in the RTC where members are obliged to cooperate, there has to, therefore, be deliberate decisions by policymakers on this matter,” Dr Gardner said.
He noted, therefore, that recent agreements by Guyana, Suriname and Trinidad and Tobago are not redundant to the work CARICOM intuitions have been doing for decades but rather good starting points.
Conclusion
Unprecedented global events have left CARICOM nations at a crossroads, with energy security as its north star. While the path is fraught with global and regional intricacies, the unified vigour of Guyana, Trinidad and Tobago, and Suriname, underpinned by CARICOM’s broader vision, might just herald a new dawn for the region.
What faces these nations today is more than an economic or political challenge; it’s a test of regional solidarity, resilience, and vision for the future. Only time will reveal if these nations can indeed break new ground, but, the foundations have undeniably been laid.
This story is supported by the Guyana Press Association Energy Reporting Grant funded by the Open Society Foundation.