DEVELOPMENT STRATEGY AND NATIONALISATION IN THE
OIL INDUSTRY OF TRINIDAD-TOBAGO: THE CASE OF SHELL TRINIDAD LIMITED
A THESIS PRESENTED TO TO
THE LATIN A;vJERICAN FACULTY OF SOCIAL SCIENCES CFLACSO)
FOR THE DEGREE OF
MASTER IN DEVELOPMENT STUDIES
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DEVELOPMENT STRATEGY AND NATIONALISATION IN THE
OIL INDUSTRY OF TRINIDAD TOBAGO THE CASE OF SHELL TRINIDAD LIMITED
A THESIS PRESENTED TO
THE LATIN A~ERICAN FACULTY OF SOCIAL SCIENCES (FLACSO)
FOR THE DEGREE OF
MASTER IN DEVELOPMENT STUDIES
Sabine Fischer, (FLASCO), Quito
Mr. Carl Parris, Snr. Lecturer in Department of Government University of the West Indies, Trinidad.
Lcdo. Gonzalo Abad, Director of FLASCO, Quito
List of Tables Introduction
1 HISTORICAL/THEORETICAL PERSPECTIVE 1.1 Theoretical Reference
1.2 Theoretical Adjustments
2 AN OVERVIEW OF Ti-lE OIL Il~DUSTRY IN TRI1HDAD 25 AND TOBAGO
2.1 British Capital and tne Oil Industry
2.2 U.S. Capital and the change in tne structure of tne Oil Industry
2.3 The Impact of tne 'Energy Crisis' on the Oil Industry.
3 AN INTERNAL ANALYSIS OF THE OIL INDUSTRY
3.1 Tne Oil Companies
3.1.1 Texaco Trinidad Limited
3.1.2 Amoco Trinidad Limited
3.1.3 Tesoro Petroleum Oil Com~any
3.1.4 Trinidad and Tobago Oil Company
3.2 Extension of the Oil Industry
4. THE Ii-1PORTANCE OF OIL RESOURCES TO TtiE 67 ECONOMY
4.1 Contribution to the Gross Domestic Product.
4.2 Contribution to Government Revenues
STATE ACTIVITIES IN THE ECONOMY 5.1 Political Ideology vis-a-vis
5.2 The First Development Strategy Based Upon tne Unrestricted
Invitation of Foreign Capital 5.3 Implementation of the Policy of
Greater State Participation in the Economy.
5.3.1. The Transference of Oil Excedents to Otner Sectors of the Economy
220.127.116.11 Oil Excedents and Heavy Industries 5.3.2. Government Participation 1n
the Oil Sector
TME NATIONALIZATION OF SHELL TRINIDAD LIMITED
6.1 Shell's decision to liquidate its Trinidad Operations.
6.2 Alternatives Open to the Government 6.3 Factors affecting tne Government's
decision to nationalize.
LIST OF TABLES
2.1 Crude Oil Production 1908-1910, 1910-1950 (bi-annually in Trinidad and TODago
2.2 Revenue Per Barrel of Oil Produced.
2.3 Annual Statistics on Crude and Gas Pro-duction 1968-1978
2.4 Annual Statistics on Refining,1968-1978
2.5 Annual Statistics on Crude Im~orts/ Exports,1968-1978
3.1 Annual Crude Oil Production in Trinidad and Tobago by Company, 1970-1978.
3.2 T~rougnput Levels of tne Texaco Pointe-a-Pierre Refinery, 1974-1978.
3.3 Average Product Distribution of Local Refine ries.
4.1 Annual Rates of Growth of G.D.P. of Trinidad and Tobago and the Oil Sector, 1967-1976.
4.2 Gross Domestic Product at Factor Cost by Sector of Origin, 1970-1977.
4.4 Contribution of Oil Revenue to Total Recurrent Revenue in Trinidad-Tobago, 1968-1978.
Total Value of Domestic Imports
Total Value of Domestic Exports.
Annual Growth of G.D.P. 1956-1962
Capital Inflows and Outflows due to Direct Foreign Investments, 1956-1967
Companies in which Government has Participation as of 1972.
Companies ln wnicn Government Equity is deld
by the Industrial Development Corporation(IDC), 1972.
5.4 Principal Cnanges in Government Holdings in Industrial and Commercial Enterprises since 1972, 1978
I. 2. 3. 4. 5 . 6. 7 • 8 . 9. 10. II. 12. 13. 14. 15. 16. 17. 18. 19. 20. 2l. 22. 23. 24. AMOCO APIP B.P. BWI. FERTRIN FLACSO GDP ILDIS 1SCOTT LPG MNC NPMC OLADE OPEC OWTU 'PCOL PNM TEXTRIN TLL TOC TRINGEN TRINMAR TRINTES TRINTOC
American Oil Company
Aid to Pioneer Industries Programme British Petroleum Oil Company
British West Indies
Fertilizers of Trinidad and Tobago Facultad Latinoamericana de Ciencias Sociales
Gross Domestic Product
Instituto Latinoamericano de Investigacio nes Sociales
Iron and Steel Company of Trinidad and Tobago
Liquified Petroleum Gas Multinational Corporation
National Petroleum Marketing Company Organizacion Latinoamericana de Energia. Organization of Petroleum Exporting
Oilfield Workers' Trade Union
Premier Consolidated Oilfield Limited Peoples' National Movement;
Texaco Trinidad Limited Trinidad Leaseholds Limited Trinidad Oil Company
-Trinidad and Tobago Electricity Commission Trinidad Workingmen's Association
-Dynadrill ing Directional
Drilling 19. Eccles Engineering Plant Cons.
21. Four Square Ser. Co. Well Serv.
22. Genfab Cons. Ltd Pipeline Cons.
23. Gaffney, Cline
24. Halliburton, T'dad Cementing, etc.
25. Henderson Oil Tool
Foreign Local Foreign Local n.k. n.k. Foreign Resident Resident n.k. n.k. Resident 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. Co. Ltd. Hydrocarb Ingram Contractors International Oil-field. Services Iere Contractors Laurence Allisoon
McDennot West Indies Co.
Mc CUllougn Servo
Con-tractors NL Industries, Baroid Div. Well Repairs Gravel Packing Offshore Cons.
38. Oceanic Contractors 39. Oceanic Del Sud
40. Offshore Ligistics Caribbean
41. Oilwell Contractors
42. Petroleum Offshore Services Ltd.
43. Petros Services 44. Rcprostat Ltd.
45. Reliable Con-tracting Co.
46. Santa Fe Drilling
48.' Seismograph Ser-vices Co.
49. Sercies Dowell Scblwnberger
51. Solus Schall
52. . Santana Services
-Offsnore Constr. Offshore Platform Transportation Workboat Cnarter Well Repairs Workover Rig Well Services Map &Log
Reproduction Drilling Well-logging Services. Velocity Surveys Cementing, gravel-packing, logging, perforating Drilling (Maina) Engineering Inspection Dri11ing Rigs, Workovers
n.k. Resident Local Foreign ~on-Resident Forei~n Nrnl-Resident Foreign I~n-Resident Foreing Resident Local Resident Foreign Non-Resident 53. 54. 55. 56. 57. Southern Drilling Contractors Tidewater
Terra Mar Tidex
Drill ing and We11
-58. T'dad Well ContrQl Directional n.k. Resident Drilling
59. Trinpet Services Underreaming n.k. n.k.
60. Trincan Perforators Logging Perfor- n.k. n.k. ating
61- Trinity Well Ser- n.k. n.k.
62. Trinidad Lease Drilling and
Operators Well Services n.k. n.k.
63. Venice Boat Vorp. Workboat Charter n.k. n.k.
64. Venwell Int. Mud Services n.k. n.k.
65. Well Services Well Repairs n.k. n.k.
66. Welex Logging,
Perfor-ating Services n.k , n.k.
67. Water &Oilwell
Service n.k. Resident
1. There is no guarantee that tnis listing is 'comprenensive'. It is based on information available wnich may not neces-sary be complete. (See Sources). Furtner, it only refers to tnose contractors whose activity is related most, uirect ly to the ~usiness of oil production. Tnere are several nundred contractors of a general nature employed by the oil companies engaged in activities from catering to
iardening to helicopter transport. These are not of concern to us nere in this study.
2. Functions identified are those wn1cn the data available suggest as some (at least) of tne functions performed. Many of tnese companies in fact provide awide variety of
services. Tne specification of functions ~rovided by tne companies in tne regis tration wi tn tile Regist r a r - General tend to be very broad and very general ~ in order, no doubt, to permit tne companies flexibility in wnat tney are li~ censed to do.
3. There are problems in identifying wnicn companies are truly local. I t is Known from otner information tuat many of
-Re5istrar-General's Files are in fact for all practical
purpose~, really foreign. Hence companies have Deen
de-signated local only wrien from otner information this can be confirmed.
4.Tnis listing of contractors relates only to triose wno ~er form specialized services related to tne core as~ects of the ~etroleum business. There are hundreds of contractors of all sorts WhO obtain business witn tne oil com~anies
engaged in everytning from grass-cutting to catering.
SOURCES: Company data; Registrar General's Files; Central Statistical Office, Register of Business Establish-ments in Trevor Farrell. A tale of Twolssued:
THE PETROLEUM INDUSTRY - A DISAGGREGATION BY FUNCTION AND AREAS OF SPECIALIZATION
Geology - Photogeology Geophysics - Geochemistry Seismology
Stratigraphy Paleantology Palynology Hydrodynamics
Gravimetry and Magnetometry Well Logging
Sedimentary Petrography Meteorology
Materials Supply Drawing
Reservoir Engineering Gathering and Storage Pipelining
~ Tank Farm Management Marine
3. Refining and Petrochemicals
Processing, running of precess plants Storage, handling and transportation Utilities
5. Transportation - Marine - Pipeline - Road
6. Projects and Construction
7. Marketing and Distribution - Local
8. Reserach and Development
9. Information and Data Processing
Utilities - Electricity generation, Water Steam - Telecommunications
Maintenance, Macnine shops, other wor~snops
- General Engineering
11. Finance and Accounting
12. Economics and Planning
13. General Administration - General Management - Personnel
- Clerical, etc.
16. Public Relations
Projects being consiaered or explored in line witn Government's planned ~rogramme of securing meaninful partici-pation in apex industries in Trinidad and TODago.
A Participation in Texaco (Trinidad) Inc., as well as tne acquisition of all Texaco distribution
A participation witn W. R. Grace and_CompallY in Federation Cnemicals.
A joint venture with Texaco to produce certain petrochemicals.
A company to produce steel
An inter-governmental company to ~roduce aluminum.
An inter-governmental company to ~roduce corn and soya been.
An inter-governmental food corporation.
. An inter-governmental snipping corporation.
Joint-venture with Amoco, Kaiser, Beker and Tenneco to produce fertiliser.
In addition, discussions were underway witn United States and Japanese based firms to produce petrocnemicals, motor-car parts, processed food and animal feed based Oll petroleum
- 137 -APPE1-JDIX 5
The statement of Government policy towards private foreign inves~ment given in toe 1972 budget speecri stress toat altriougn toere would be continued invitation of private foreign capital, greater control over tne country's national resources must reside in tne country.
We welcome new foreign investment whico burgs ln expertise, new tecrinology and accessto export markets to assist and supplement national efforts
in our development.
No new 100 percent foreign-owned enter~rises will be allowed in key sectors of tne economy and national participation in joint ventures involving new
foreign firms must be of meaningful participation.
Alienation of land will not be permitted.
Existing foreign-owned enterprises~usttake steps to facilitate national participation,including in particular worker-participation.
Certain areas of our economy are reserved exclusively for national effort.
All firms, wnatever tne structure of tneir owner-snip, must in their operations give ample opportu-nity to transfer to nationals tne SKills, ~nowledge
and expertise required to run tne business.
-An integral part of our overall policy towaras
foreign investment is to diversify the sources of investment
funds and in particular, to seek the participation in our
national development of European and Japanese cavital and
entrepreneurship, an addition to capital from tne traditional
sources such as the United Kingdom, tne United States of
America and Canada". Current policy in this regard seeks to
further diversify the sources of investment~ capital
SOURCE: White Paper No. 1 on Public Sector Participation in
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