A recent media report highlighted the contents of the 2019 Ryder Scott audit, which gives an update on critical information on our gas sector. After reading the article and having some knowledge of past reports, I was surprised at the apparent negative slant the article took, on what was obviously positive news for Trinidad and Tobago and our gas industry.
The newspaper report seemed to suggest the gas industry may be in some difficulty with only 12 years of gas left. However, the fact is this repre- sents an increase in the years of proven gas we have as a country, as at 2019. In fact, our proved reserves had reversed the trend of decline and recorded increases since 2018. This is not only big news, but very positive news for a country which depends on the gas sector for our livelihood.
The experts would tell us that proven reserves, as a total quantity or measured in years of gas remaining, is a moving target because on an annual basis 1.3 tcf of gas is produced in this country, which diminishes our reserves. In order to replenish that, an equivalent amount or more needs to be discovered and brought to a point where it can be produced, or else our reserves will decline.
The fact that the last two Ryder Scott audits indicate that we are not only averting the decline but increasing our reserves is a clear sign that exploration efforts are bearing fruit and we are replacing the gas we are utilising.
In 2019, the sector was able to replace 113 per cent of volume utilised, accounting for the growth in reserves reported. Between 2016 and 2019, proved reserves have increased from 9.9 tcf to 10.7 tcf. This is no easy feat, given the higher replacement rate of gas needed to increase reserves. Experts liken this to walking up a downward- moving escalator.
What was even more striking in the newspaper article was the massive increase in oil reserves recorded. While year on year, our proved reserves of oil increased by 10.3 per cent and probable reserves by 16.6 per cent, there was a gigantic leap in our prospective oil resources by 773 per cent from 2012 to 2018, which stood at 3.2 billion barrels in 2018. While production has been on the decline and the industry endures the price shock from earlier in the year, with renewed focus through Heritage and other producers, there appears to be a silver lining in our future prospects in the oil industry as well.
The fact that we are seeing positive movement in our gas reserves and oil reserves is indicative of the confidence energy producers have placed in Trinidad and Tobago.
This improvement in our circumstance is the direct result of increased investment in exploration and production by our energy players and strategic partnerships with each other and the Government of Trinidad and Tobago. This is also testament to a successful policy pursued in the energy sector by this Government which has created more certainty for large producers to invest. Notwithstanding the need to diversify our economy, with which I wholly agree, the fact is the energy sector will be our mainstay until that transition is accomplished. It is important to not only understand the moving parts and dynamics, but ensure it is able to sustain us in the long run. The Ryder Scott report shows clear positive signs in our energy sector, which can easily end up in a precarious state if wrong decisions are made.
I believe this Government has managed to keep its priorities right and policy on point when it comes to the energy sector, despite the risky climate within which it operates. This has created stability in the upstream, and averted much of the decline we have seen in the last decade.