Caribbean Islands Table of Contents
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