T&T ENERGY MINISTER DISCUSSES INFRASTRUCTURE

C O N F I D E N T I A L SECTION 01 OF 03 PORT OF SPAIN 000128

SIPDIS

SIPDIS

STATE FOR WHA/CAR, WHA/EPSC, EEB/IEC
ENERGY FOR OFFICE OF POLICY AND INT'L AFFAIRS
NSC FOR WESTERN HEMISPHERE - V ALVARADO
CARACAS FOR PETROLEUM ATTACHE

E.O. 12958: DECL: 03/11/2018
TAGS: EPET ECON EAGR PREL KCRM VZ XA TD
SUBJECT: T&T ENERGY MINISTER DISCUSSES INFRASTRUCTURE
PROTECTION, VENEZUELA, RENEWABLE ENERGY, OUTREACH TO AFRICA

REF: PORT OF SPAIN 119

Classified By: Ambassador Roy L. Austin; Reasons 1.4 (b,d)


1. (C) SUMMARY: In a March 5 office call, Trinidad and
Tobago (T&T) Energy Minister Conrad Enill welcomed U.S.
engagement on energy infrastructure protection and U.S.
Embassy suggestions on legislation to improve law
enforcement, while also softly echoing past messages that T&T
does not want to be ignored. He reaffirmed the GOTT's
arms-length stance on Venezuela's PetroCaribe and ALBA
initiatives, at the same time indicating a move to renew
momentum to negotiate with Venezuela on cross-border gas. In
describing GOTT outreach to African energy producers, Enill
made cear he does not think T&T needs the Extractive
Idustries Transparency Initiative. On renewable enrgy, he
said the GOTT is seeking advice on whichapproaches hold
promise and said he is open to bilatral cooperation. END
SUMMARY


2. (SBU) Durng a March 5 introductory call, the Ambassador
hd a lengthy and wide-ranging conversation with Conad
Enill, Trinidad and Tobago's (T&T) new Ministr of Energy and
Energy Industries. Enill was joined by his assistant Dawn
Pierre. EconChief accompanied as notetaker.


3. (C) The Ambassador opened the meeting by passing Enill a
non-paper with suggestions for legislation to improve law
enforcement, in view of Enill's role as Leader of Government
Business in the T&T Senate. Enill welcomed the suggestions,
saying he intends to spend time on the crime issue. He
demurred on the Ambassador's invitation to visit Washington,
saying his new duties will keep him close to home for the
time being.

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Infrastructure Protection and Venezuela Relations
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4. (C) The Ambassador thanked Enill for his ministry's
support for the USG vulnerability assessment of energy
infrastructure in January. Enill noted two points he had
taken away from the assessment team's January 18 outbrief:
(1) the ISPS Code was only a baseline for port security, not
the end-point; and (2) no one really knows how T&T's existing
response mechanisms would handle a terrorist attack. T&T
could not discount the risk of an attack, Enill continued,
particularly as long as Venezuela continues to be
unpredictable and T&T continues "not playing along" with
regional initiatives like PetroCaribe and ALBA. He added
that Trinidad and Tobago seeks to avoid being caught in the
middle of any dispute between Venezuela and the United States.


5. (SBU) Enill said Prime Minister Manning's travel schedule
was making it difficult to confirm dates for the regional
workshop on critical energy infrastructure protection that
the Department of Energy (DOE) and U.S. Southern Command
propose to organize in Port of Spain. EconChief replied that
while the U.S. would be delighted to have the PM participate,
DOE and SOUTHCOM envisaged a meeting at the senior technical
level, not a meeting of ministers. Enill responded in that
case the PM may not need to participate, and he undertook to
get a quick decision on dates.


6. (C) On the natural gas fields that straddle the
T&T-Venezuela border, Enill said T&T is putting together a
team to renew negotiations on unitization of the
Loran/Manatee field. (Note: GOTT and industry contacts tell
us negotiations had stalled since T&T tabled a field specific
unitization agreement in June 2007.)


7. (C) On PetroCaribe, Enill echoed recent statements by PM
Manning linking PetroCaribe to Venezuela's Bolivarian
Alternative for the Americas (ALBA) and concluding that T&T
cannot participate in either initiative because it remains
committed to the Free Trade Area of the Americas (FTAA)
concept. Enill estimated the level of debt incurred under
PetroCaribe for other Carbbean nations at US$1.5 billion so
far. T&T for its part was contributing TT$420 million (US$67
million) annually to a CARICOM fund to assist import
dependent countries facing high oil prices. Most of the
importing countries, on the other hand, appear happy to

PORT OF SP 00000128 002 OF 003


receive both grant money and refined products from Venezuela,
leaving repayment to future governments and probably hoping
the debt will be written off in the end.

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U.S.-T&T: "No problems, but don't ignore us"
--------------

8. (C) On U.S.-T&T energy relations, Enill welcomed the
Ambassador's statement that the U.S. values T&T as a reliable
supplier, and he admitted to not yet having a full
understanding of T&T's importance to U.S. energy security.
The Ambassador suggested that Enill take a look at the role
of T&T's liquefied natural gas in Boston. Enill also said
that he was not aware of any bilateral issues per se, but
"there is a view" that the U.S. has taken T&T for granted.
(Note: Prime Minister Manning had given strong voice to that
view in public remarks and private meetings in late
2006/early 2007, but has toned such rhetoric down since the
June 2007 Conference on the Caribbean.)


9. (C) Enill said he is interested in renewable energy and
would welcome opportunities for bilateral cooperation in that
area. With numerous promising technologies under
development, Enill said he has asked researchers at the
University of Trinidad and Tobago (UTT) to provide some
analysis so that the GOTT can make informed choices. He
observed, for example, that T&T's sugar cane could not
compete for ethanol production because it contained too much
water and not enough sugar. Rectifying this would have
required T&T to shift sugar cane to its most fertile land,
displacing food crops. This had not been "sorted out" by the
time the GOTT withdrew its support for sugar production in

2007. In any case, T&T's future lies with knowledge based
industries, not traditional activities like sugar that could
only survive with government support or preferential market
access. A large-scale demonstration farm planned for Tucker
Valley in Trinidad with support from Cuban technical advisors
might provide new directions for agriculture, but Enill also
hinted that Cuba's involvement was creating problems for that
project.

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Outreach to Africa and Revenue Transparency
--------------

10. (SBU) On the GOTT's outreach to African energy producers,
Enill observed that African countries had been surprised to
learn of T&T's success in monetizing natural gas when PM
Manning participated in a February 2007 African Union
meeting. T&T is continuing its technical assistance to
African countries on managing hydrocarbon resources, Enill
noted, indicating that some of the Africans have ambitious
goals to commercialize natural gas as early as 2009/2010,
believing it will be possible to gain expertise and run their
own institutions in that short time frame. Enill observed
that these countries would have to structure fiscal
incentives to attract foreign investment, but he added that
some are already being courted by China and India. (Note:
The GOTT announced in 2007 that it would provide technical
assistance to help a number of African countries monetize
their natural gas, including Angola, Cameroon, Chad,
Democratic Republic of Congo, Equatorial Guinea, Gabon,
Nigeria and Tanzania.)


11. (SBU) Asked whether revenue transparency figured in T&T's
outreach efforts, Enill said that was where the Extractive
Industries Transparency Initiative (EITI) comes in,
emphasizing that EITI was really designed for those
countries. In contrast, T&T is already transparent,
reporting energy sector revenues as a separate budget line
item and maintaining robust mechanisms under its Board of
Inland Revenue to ensure energy revenues are deposited with
the Treasury. T&T derives revenue from taxes on energy
companies, where as African countries are more likely to
derive revenues through owning energy companies. (NOTE:
Trinidad's own EITI candidacy, on which the Ministry od
Finance has the lead, is stalled at this time.)

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Attracting Upstream Investment
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12. (SBU) The Ambassador pointed out that U.S. energy

PORT OF SP 00000128 003 OF 003


companies hope the GOTT too will get financial terms right
when it next offers deep water blocks for bid. Enill
acknowledged that T&T's 2006 bid round had suffered from poor
seismic data, excessive local content requirements, and too
much time between opening and closing the round. He said
these problems would be corrected in bid rounds planned for
2008 and 2009. Referring obliquely to the financial
incentive question, he said the GOTT will have to strike a
balance between the need to compete for investment and the
need to get the best value from T&T's depleting resources.
He also expressed confidence in the future of oil and gas in
T&T, citing improved exploration technology, forthcoming
policies to maximize production from marginal fields, and the
entry into T&T's market of new players with lower cost
structures.


13. (C) COMMENT: In his previous incarnation as a junior
finance minister, Enill had a reputation for steadfastly
defending PM Manning's budget priorities. The same appears
to hold true for energy, where Enill is carefully staying on
message, for exemple on financial incentives in future bid
rounds and PetroCaribe. Per reftel, Chevron executives have
welcomed Enill's public statements on cross-border gas and
would like him to reach out directly to his BRV counterpart.
While Enill did not elaborate on cross-border gas, he was
quite open with his views on Venezuela, and his remarks on
infrastructure protection, renewable energy, and outreach to
African producers offer opportunities to deepen cooperation
in those areas. On issues of bilateral interest, Enill made
it clear that he does not$think T&T needs the EITI, so it
remains to be seen whether the new Finance Minister will get
behind T&T's EITI candidacy.
AUSTIN