Hydrocarbons Remain Central To T&T’s Outlook

• T&T's hydrocarbons sector will remain a central driver of growth in the coming years. In 2008, the sector accounted for half of GDP, but it fell into a broad decline in 2011 as its natural gas and crude oil fields began to mature, which was compounded by the collapse of oil prices in 2015. 
• However, rebounding energy prices from H2 2020 will benefit the gas sector as a whole, supporting production and investor interest in T&T's untapped reserves over the near term. Notably, a challenging operating environment will most likely keep investment in the sector relatively subdued, undermining its long-term outlook. 
• Increased demand for natural gas in the coming years will divert investment flows meant for oil projects to natural gas projects as the global energy market looks to shift away from high-carbon-emitting energy sources. 
• Given T&T's continuing dependence on its hydrocarbons sector, fluctuating energy prices will present persistent risks to growth. However, over the coming quarters, Fitch Solutions expects rebounding energy prices to ease risks to T&T's external accounts. Stronger external accounts will allow imports to rise, which would allow pent-up demand for capital goods to rise, boosting investment. A sustained increase in prices would also make upstream exploration and development more attractive to international oil companies.

(Source: Fitch Solutions)