A team of oil and gas specialists have been summoned from the Republic of Trinidad and Tobago to assist Barbados with an urgent oil drilling mission, as the country looks long-term at cushioning any likely economic blow from the escalating conflict between Russia and Ukraine.
Minister of Energy, Small Business and Entrepreneurship Kerrie Symmonds, responding to the news, urged citizens to brace for the possible impact, revealing that the most recent developments have made feared gas price increases “almost inevitable”.
On Tuesday, following weeks of extraordinary tension between the two countries and their allies, Russian president Vladimir Putin recognised the independence of two breakaway Ukrainian regions and deployed troops to both.
The decisions prompted a range of sanctions from western allies of Ukraine including the United States of America (USA), the United Kingdom (UK) and the European Union (EU) who are accusing Russia of severe breaches of international law.
But the sanctions, which include the halting of the Nord Stream 2 pipeline – a key gas pipeline between Russia and Germany, will affect countries that are heavily dependent on imported energy to oil much of its economic machinery, including Barbados.
And, with Europe relying on Russia for about 40 per cent of its gas, the conflict is expected to drive up demand from other oil-producing nations.
“The commercial and economic impact of this action can only be measured with the passage of time and there are still a variety of variables which are likely to arise but which are not yet in place, that make predictions very difficult,” Symmonds told Barbados TODAY.
“It is almost inevitable, however, that this escalated level of tension will result in a further increase in global gas prices and as an energy-importing country we have to gird our loins for the possible impact,” the energy minister added.
Hours after the news broke on Tuesday, he disclosed that a supply analysis conducted by the Barbados National Oil Company (BNOC) revealed that only 30 per cent of the gas consumed here is locally produced with the remaining 70 per cent imported.
“To mitigate the effect of this we have brought in a team of specialists from Trinidad and they are at present working with us to perforate some of the old wells with a view to extracting more product,” disclosed Symmonds.
“I have no clear estimate of any likely gas recovery levels but we do expect that our old wells should be able to increase production by approximately 200-250 barrels a day which will help to blunt the impact of the possible price surge.
“Beyond that I have instructed both BNOC and NPC to fully assess their operational processes with a view to identifying greater economies. A few recommendations are already in my possession but these will be worked through with the Prime Minister and the Ministry of Finance prior to any further discussion,” the Symmonds added.
In the meantime, the minister urged citizens to conserve energy as the country continues to monitor what he described as an apparent Russian expansionist agenda in Eastern Europe.
“In the interim we will remain vigilant and continue to monitor this very fluid situation in Europe. Escalating tension between Ukraine and Russia does none of us any good especially in a post-pandemic environment,” he added. [email protected]