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Caribbean Islands Petroleum and Asphalt
Petroleum and its derivatives has been the major sector of the
economy since World War II, achieving its greatest importance
during the boom of the 1970s, when it accounted for as much as 40
percent of GDP and more than 90 percent of export earnings. Oil
output peaked in 1978 with the production of 84 million barrels.
Output then declined from 1979 to 1983 but rebounded to 64 million
barrels by 1985. Although the earliest oil fields were located on
the southwestern peninsula of Trinidad, significant reserves were
later tapped off the island's southeastern coast and off Point
Fortin in the Gulf of Paria. Since 1974, however, there have been
no major oil discoveries, causing a slow decline in the country's
ratio of reserves to production. Although proven reserves were
estimated to last fewer than ten years at the 1987 rate of
extraction, decreased production and anticipated new oil finds were
expected to allow the country to produce into the twenty-first
century. Proven oil reserves stood at 540 million barrels in 1987.
It was estimated that over three-quarters of Trinidad and Tobago's
crude oil reserves had already been found. Over 60 percent of
reserves were located offshore. In 1985 approximately 77 percent of
oil produced was drilled offshore. In the late 1980s, Trinidad and
Tobago was not a member of the Organization of Petroleum Exporting
Countries.
The first exploratory wells were drilled in Trinidad near Pitch
Lake at La Brea during the 1850s and 1860s, making them some of the
earliest wells in the world (see fig. 8). Commercially viable
production did not flow from the wells, however, until 1909 (see
Growth and Structure of the Economy, this ch.). The young oil
industry suffered from many industrial hazards, making injury
rather common, which helped create strong oil worker unions.
Production expanded again during World War II and thereafter until
it peaked toward the close of the oil boom in 1978. The output of
oil was revived briefly in the mid-1980s because of a reduction in
some production taxes, but dwindling reserves and low oil prices
continued to restrict output (see table 5, Appendix A).
Oil production was historically controlled by large foreign
companies, such as Shell, British Petroleum, Texaco, and Amoco, the
latter also known as the Standard Oil Company of Indiana. By the
late 1980s, however, the government had purchased all foreign
operations except Amoco. In 1985 the government completed the
purchase of the remaining operations of Texaco as well as the
residual 49-percent share of a small Texan company, Tesoro, from a
previous joint venture with the government. Nonetheless, even with
the new government purchases, Amoco still produced over 50 percent
of the country's oil, possessed most of the newer and more
productive oil fields, and controlled over 70 percent of the
natural gas reserves. As oil reserves and production continued to
decline in the late 1980s, the government once again was
considering inviting foreign oil companies to assist with the
exploration and drilling of less accessible oil.
Amoco did not refine any of its oil locally, as both of the
island's refineries, at Pointe-à-Pierre and at Point Fortin, were
government owned. The Pointe-à-Pierre refinery, with a capacity of
220,000 bpd, was traditionally the main facility. Point Fortin's
share of refining, however, climbed to 30 percent in 1985 because
of the installation of a pipeline connecting the two refineries to
improve efficiency. Total refinery capacity was 310,000 bpd. For
decades crude oil was imported by Trinidad and Tobago from Saudi
Arabia, Venezuela, Iran, Indonesia, Nigeria, and Ecuador and then
refined and reexported. Refinery activity, however, was reduced
more than 50 percent in the first half of the 1980s; after 1983
refining of the imported oil ceased altogether as a result of the
depressed world oil market. The percentage of domestically refined
crude diminished as well. By the late 1980s, only 20 percent of
refinery capacity was in regular use, making operations very
inefficient and entailing large financial losses by the government.
In addition to its oil reserves, Pitch Lake at La Brea
contained the world's largest source of natural asphalt. The lake,
considered by some to be one of the wonders of the world, had been
producing asphalt for decades. Asphalt production continued its
slow decline in the 1980s, however. In 1985 only 21,400 tons of
asphalt were produced, in contrast to the figure of 128,300 tons
achieved in 1970. Although most asphalt was exported, it was also
used domestically for paving roads and in the construction
industry. Roughly 80 percent of asphalt output took the form of
dried asphalt, whereas the remainder was asphalt cement.
Data as of November 1987
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