June 2003

Note: information contained in this report is the best available as of June 2003 and can change.

GENERAL BACKGROUND
The islands of the Caribbean basin, with a total population of approximately 37 million in 2002, are predominantly net energy importers, with the exception of hydrocarbon rich Trinidad and Tobago. Agriculture and natural resource extraction activities continue to constitute the basis of the islands' economies, though tourism and service sectors are growing. In the larger economies, manufacturing is also important, such as oil and natural gas production in Trinidad; pharmaceuticals and cement in Puerto Rico; and textiles in the Dominican Republic and Jamaica.  Economic growth, however, varies across the region. While many of the islands' economies contracted in 2002, Trinidad and Tobago and the Dominican Republic's economies continued to grow, with real gross domestic product (GDP) growth rates of 2.6% and 4.1%, respectively.

Over the past decade, the Caribbean states have made efforts to integrate their economies. The major regional organization is the Caribbean Community and Common Market (CARICOM), whose members include the South American states of Guyana and Suriname and the Central American State of Belize, and the Caribbean islands of Antigua and Barbuda, The Bahamas, Barbados, Dominica, Grenada, Haiti, Jamaica, Montserrat, St.Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines and Trinidad and Tobago. All other islands, with the exception of Cuba, have either associate or observer status. The Caribbean Community has three objectives: (a) economic cooperation through the Caribbean Single Market Economy; (b) coordination of foreign policy among the independent Member States; and (c) common services and cooperation in functional matters such as health, education and culture, communications, and industrial relations. CARICOM countries have steadily reduced tariffs among members. Besides CARICOM, the other main organizations of the region include the Association of Caribbean States, the Eastern Caribbean Currency Union and the associated Eastern Caribbean Central Bank.

OIL AND NATURAL GAS
In 2001, the islands of the Caribbean region consumed a combined total of 2.2 quadrillion Btu of energy. Oil is the dominant fuel, accounting for about 92% of total 2001 energy consumption.  The Caribbean relies on imported oil for most of its energy needs. Barbados, the Dominican Republic, Haiti, and Jamaica are party to the San Jose Pact, under which Mexico and Venezuela supply crude oil and refined products under favorable terms.   Natural gas and hydropower are used in countries that have these domestic resources. Natural gas is used most extensively in Trinidad and Tobago, where natural gas-intensive industries, such as steel, fertilizer, and petrochemicals are important to the country's economy. Puerto Rico and the Dominican Republic import liquefied natural gas (LNG) from Trinidad and Tobago for power generation.

Production
Only three Caribbean countries have oil and natural gas reserves: Barbados, Cuba, and Trinidad and Tobago. Of these, Trinidad and Tobago is the only significant exporter.

Trinidad and Tobago
Trinidad and Tobago is the Caribbean's largest producer of oil and gas. In 2002, oil production averaged about 141,500 barrels per day (bbl/d), of which 121,833 bbl/d was crude oil. Crude oil reserves, at an estimated 716 million barrels, are expected to last only another decade unless new reserves are found. BP is the nation's largest oil and gas producer. Petrotrin, the state oil company, is the second largest oil producer.

In contrast, the country's natural gas reserves are expected to increase significantly in coming years. Proven natural gas reserves currently stand at 23.5 trillion cubic feet (Tcf). In 2001, the country produced 536 billion cubic feet (Bcf) of natural gas.

Trinidad and Tobago has become one of the major natural gas development centers in the world. Natural gas is expected to surpass oil as the main revenue earner for the country in the near future. According to the Trinidad and Tobago Ministry of Energy and Energy Industries, about 36% of its natural gas was exported in 2002 as liquefied natural gas (LNG), while the rest was used domestically, particularly for ammonia and methane manufacturing. Trinidad now has nine ammonia complexes, six methanol units, a urea plant, and an iron and steel complex. In early 2004, the largest methanol plant in the world, Atlas, is expected to be completed. Atlas will be surpassed by an even bigger methanol project, M5000 facility, which is due to enter production in 2004. Trinidad is the world's leading exporter of both ammonia and methanol.

Exploration and Production
Both natural gas and oil exploration activities in Trinidad and Tobago have continued at a fast pace over the last three years. During 2000-2001, British Petroleum Trinidad (BPTT) alone added more than 6 Tcf to its own reserves. EOG Resources (U.S.) announced in May 2002 a new discovery in its SECC block, located off Trinidad's eastern shore. The new discovery is expected to add 250-350 Bcf of natural gas to the field's existing reserves. Repsol-YPF and BPTT discovered in September 2002 nearly 1 Tcf in the Iron Horse field, located east of Trinidad and Tobago.

Recent Developments
The Trinidad and Tobago government granted approval in March 2003 to BHP Billiton, TotalFinaElf, and Talisman Energy to proceed with the $726 million first phase development of the Greater Angostura project, located off the northeastern coast of Trinidad. The companies will be developing Block 2(C). Billiton estimates that the block contains up to 160 million barrels of oil and 1.75 Tcf of natural gas. It is expected that this field could produce 75,000 to 100,000 bbl/d, significantly increasing the country's crude oil production.

In April 2002, BG International, Billiton, Talisman, and TotalFinaElf signed a Production Sharing Contract (PSC) with the government for the adjacent Block 3(a). The group plans to drill two wells in the Block later this year.

Deepwater Exploration
In 1998, Shell, BP, Arco and ExxonMobil received licenses to drill off the eastern coast of Trinidad in depths ranging from 2,460 to 4,921 feet. The four deepwater Blocks - 25(a), 25(b), 26 and 27 - have yet to produce oil after drilling seven wells. In March 2003, Shell returned Block 25(a) to the Trinidad government, after the well proved to be noncommercial. The Trinidad government is not giving up hope of finding commercial deposits of oil. In June 2002, the government, in conjunction with 12 foreign firms, undertook a new seismic study of previously unexplored regions with depths ranging from 5,576 to 9,480 feet.

New Licensing Round
The Trinidad and Tobago government plans to launch a nine-block licensing round, which is expected to run from May 23 to September 30, 2003. The first two Blocks, 23(a) and 24(b), are in ultra-deep water. They are located near the area where the government recently conducted a seismic study (mentioned above). Blocks 2(ab), 3(b) and 4(a) are located in shallow waters to the east of Trinidad. Blocks 1(a) and 1(b) are west of Trinidad in the Gulf of Paria. The finally two Blocks, 22 and 24, also located near 23(a) and 24(b), but are not as deep.

Joint Field Development with Venezuela
Trinidad and Tobago has been in negotiations with Venezuela to develop and possibly combine the two countries' gas reserves in the Deltana region, located of the Paria Peninsula. These negotiations, however, have been placed on hold.

Pipelines
The Trinidad and Tobago government plans to build an undersea natural gas pipeline throughout the eastern Caribbean states. The proposed 600-mile pipeline would run north from Trinidad, connecting to other islands en route to the French island of Guadeloupe. The pipeline would serve the islands Martinique, Guadeloupe, Barbados, Grenada, St. Vincent, Grenadines, St. Lucia and Dominica. There has also been discussion of potentially extending the pipeline to Florida.

LNG
Trinidad and Tobago is the largest LNG exporter to the United States. The Atlantic LNG Company of Trinidad and Tobago currently operates three LNG trains on the islands. The Atlantic plant is considered the largest single-train plant ever built, and the first LNG producer in the Latin America and Caribbean region.

The plant recently underwent a $1 billion expansion to triple its capacity from 3 million to 9 million tons per year by adding a second and third train. Train 2 began operation in August 2002, while Train 3 came on line in April 2003. 62.5% of the total output of Trains 2/3 is committed to the Spanish market. The remaining 37.5% is sold in the U.S. market, mainly in southeast, through the Elba Island Terminal and to Lake Charles. The Dominican Republic also imports LNG from Trinidad.

BP is building one of the world's largest offshore gas processing units, the Kapok platform, as part of a $600 million project to supply gas to these additional trains. BPTT is also constructing a 30-mile long pipeline, the "Bombax". The pipeline will feed natural gas from Kapok to Atlantic LNG's Trains 2 and 3, and to the Atlas Methanol plant. The pipeline will be one of the world's largest, with a transport capacity 2 billion cubic feet per day (Bcf/d).

Partners of Train 1 are BP, BG, Repsol, Tractebel, and National Gas Company of Trinidad and Tobago (NGC). Partners of Train 2 and 3 are BP, BG and Repsol.

Additional Trains
Negotiations for the construction of a fourth train, which, according to design plans, would raise Trinidad and Tobago's LNG production capacity to 13.8 million tons per year, are ongoing. The construction of the fourth train was originally scheduled to begin by the end of 2002 and come online at the end of 2005. The government has also indicated that it would be interested in constructing a fifth and sixth train.

Cuba
Cuban oil production has more than doubled since 1991. In 2002, Cuban oil production averaged 49,300 bbl/d while oil consumption averaged 157,000 bbl/d. Most domestic crude oil production consists of a heavy, sulfur-laden oil, which is converted into usable fuel. Refineries process imported crude oil, mainly from Venezuela and Mexico. Cuba has a financial arrangement with Venezuela, allowing for the sale of oil under preferential conditions. Cuba imports 53,000 bbl/d of crude oil and refined products from Venezuela, representing approximately a third of the island's oil demand. The contract, which was signed in October 2000, is set to expire in 2005. Natural gas production has also increased significantly in Cuba since the early 1990s. As of January 2003, proven natural gas reserves stood at 2.5 Tcf.

Exploration and Production
The Cuban government plans has set a goal to generate all of its electricity demand from domestic crude oil resources, making the island self-sufficient in energy. Increases in oil and natural gas production already fulfill more than 50% of domestic energy demand, according to the Cuban government. The government has forecasted that the combined oil and natural gas production will increase by 17% in 2003.

Cuba's territorial waters in the Gulf of Mexico are expected to hold the most promising oil prospects. In early 2000, Cuba offered 59 offshore blocks in its deepwater economic exclusive zone (EEZ) for oil exploration by international oil companies. The Cuban government has awarded Repsol-YPF (Spain) and Sherrit International (Canada) blocks in the EEZ. The United States maintains an economic embargo against Cuba, and oil companies from other countries may be subject to U.S. sanctions under the Helms-Burton Act of 1996 if they conduct significant transactions in Cuba.

New Developments
Sherrit International announced in March 2003 that it plans to invest $110 million in its oil and gas operations in Cuba. Petrobras of Brazil expressed interest in restarting oil exploration in Cuba after the Cuban government offered Petrobras a deep-water exploration block in Gulf of Mexico. Two years ago, Petrobras abandoned exploration efforts in Cuba following disappointing results. Pebercan (Canada) doubled crude oil production at its Block 7 joint-venture (Sherrit) in 2002. Pebercan expects to increase its production as it brings more wells online.

Barbados
Oil production for 2002 totaled 1,200 bbl/d. Oil production has declined slightly since 2001 despite efforts of Barbados National Oil Company (BNOC) to expand oil production. BNOC contracts with a consortium led by Triassic. As Barbados has no refining capacity, its oil is refined in Trinidad, and then returned for domestic consumption.

Other Regional Developments
Jamaica announced in April 2003 that it plans to restart exploration efforts off its southern coast. Jamaica expects to receive support from Ecuador and Venezuela.

U.S. companies AES Ocean LNG and El Paso and Belgium's Tractebel have plans to build regasification terminals in the Bahamas, from where it would be piped to Florida.

If approved, AES would construct a regasification terminal at Ocean Cay in the Bahamas, along with a 54.3-mile pipeline to Florida. The pipeline would have a capacity of 842 million cubic feet per day (Mmcf/d). AES has already received provisional permission from both the U.S. Federal Energy Regulatory Commission (FERC) and the Bahamian government. Environmental impact assessments will determine whether the project will be able to proceed.

Tractebel, which also received approval from FERC but is still waiting approval from Bahamian authorities, would build a LNG regasification terminal in Freeport, on Grand Bahama Island, as well as a 54-mile pipeline (Calypso), with a capacity of 832 Mmcf/d.

El Paso has already received provisional approval from the Bahamian government but not yet from FERC. El Paso also plans to build its terminal on Grand Bahama Island. The pipeline (Seafarer) would have a capacity of 1 Bcf/d. The Bahamian government indicated, however, that it would only accept two of the three proposed projects.

In November 2002, the Bahamian government granted the oil company Kerr McGee a license to drill oil in Bahamian waters.

Refining
Crude oil refining capacity in the Caribbean exceeds 1.7 million bbl/d.  Smaller refineries are geared towards meeting local demand, while the larger refineries in Aruba, the Netherlands Antilles, Trinidad and Tobago, and the U.S. Virgin Islands serve both local and export markets. The Hovensa refinery of St. Croix, owned by Hess and the Venezuelan state oil company, PdVSA, is among the largest in the Western Hemisphere.  PdVSA also operates the Curacao Isla refinery (the Netherlands Antilles), which the company is in process of expanding. PdVSA is investigating the possibility of building two new refineries in the Dominican Republic, as well as reactivating the Cienfuegos refinery in Cuba.

In August 2002, the Trinidad and Tobago government granted Soreco Inc. approval for the construction of a 224,000-bbl/d refinery. The refinery, the Sabaneta Refinery Project, is expected to be completed in 2005. However, it remains unclear whether the project will move forward due to difficulties of securing $2 billion in loans for the project. U.S. energy company El Paso plans to sell its refinery on Aruba, Coastal Aruba Refining Company, in 2003.

Storage
The Caribbean region has a number of independent petroleum storage facilities, with the capacity to store approximately 100 million barrels of crude oil and petroleum products. In addition to long-term storage arrangements, these facilities offer logistical options for petroleum shipments. Islands with storage facilities include: Bahamas, Trinidad, Puerto Rico, Saint Lucia, Aruba, and St. Eustatius, Curacao, and Bonaire of the Netherlands Antilles.

Exports to the United States
In 2002, the continental United States imported about 390,000 bbl/d of petroleum from the Caribbean, of which about 83% were petroleum products. The U.S. Virgin Islands was the largest single regional exporter to the United States (about 236,000 bbl/d of petroleum products), followed by The Netherlands Antilles (about 74,000 bbl/d of petroleum products), and Trinidad and Tobago (80,000 bbl/d of total crude and petroleum products). Trinidad and Tobago is the only exporter of crude oil (68,000 bbl/d) from the region.

ELECTRICITY
Installed electric generating capacity in the Caribbean exceeds 17 gigawatts (GW). In general, the region needs additional capacity. Several countries (including the Dominican Republic, Haiti, and Cuba) experience power outages on a regular basis. Electricity demand in the region is expected to grow substantially in the coming decade.

The Dominican Republic
The Dominican Republic has been plagued by electricity blackouts for years. In 1999, the former President Leonel Fernandez privatized parts of the state-owned Dominican Electricity Corporation (CDE) in the hope of eliminating the country's power outage problems. However, privatization has yet to assure a steady supply of electricity to the population.

A dispute between the Dominican government and the private companies which acquired parts of CDE in 1999 reportedly is partly responsible for the blackouts. When CDE was split up, Union Fenosa (Edenorte and Edesur subsidiaries) and AES (Edeeste subsidiary) bought into the distribution network. In September 2002, the government and customers began falling behind on their payments, leaving the private companies without enough money to pay generators. The distributors periodically stopped supplying electricity, resulting in blackouts. Although current President Hipolito Mejia renegotiated contracts between the government and private power companies in an effort to solve the country's power supply problems in September 2002, the situation has not improved.

Despite the need for further structural reform, foreign firms continue to invest in the Dominican Republic's power infrastructure. AES Andres, a subsidiary of AES, has invested $400 million to construct an LNG import terminal, a regasification facility, a pipeline and a 300-MW combined cycle power plant, located outside of Santo Domingo. The LNG terminal received its first shipment in February 2003. However, since the 300-MW power plant will not be completed until summer 2003, the imported natural gas has been going to the Los Mina power plant in Santo Domingo, which AES converted from fuel oil to natural gas.

In April 2003, Canada signed two $35 million agreements with the Dominican government to build hydroelectric and renewable energy projects.

Jamaica
In March 2001, the U.S.-based utility, Mirant Corporation, completed an 80% acquisition of formerly government-owned Jamaica Public Service Company, the island's main power provider. Mirant has stated that it is making progress in reducing the number of blackouts currently affecting Jamaica due to lack of capacity. Including independent producers, installed capacity is 700 MW, and Mirant expects to add 385 MW to the system in 2003. Last year, Jamaica made the decision to begin replacing fuel oil with natural gas for its power plants and bauxite and alumina sectors. The Jamaican government plans to import LNG to meet natural gas demand.

Puerto Rico
In January 2000, Puerto Rico's primary electric power producer and grid operator, publicly-owned Puerto Rico Electrical Power Authority (PREPA), initiated a $2.4 billion program to increase the island's electric generation capacity. Economic growth in the late 1990s averaged 3%, resulting in concerns that electricity demands associated with economic growth would exceed generation capacity. In response, PREPA began signing contracts with independent power producers (IPPs) to increase the island's generation capacity from about 4.9 GW to 5.2 GW by 2003.  A new 454-MW power station, built by U.S.-based AES, is the first coal-fired plant in Puerto Rico. The plant has the additional benefit of being able to sell its steam to Phillips Petroleum's Puerto Rico subsidiary. The EcoElectrica and AES facilities are part of a general plan to reduce Puerto Rico's dependence on oil for electricity generation. In August 2000, the first shipment of LNG from Trinidad and Tobago arrived at Punta Guayanilla, near Ponce, where there is an LNG receiving terminal used to supply gas to the plant.

Renewable Energy
Only Jamaica and Cuba had significant amounts of power generated from non-hydro renewable (geothermal, solar, wind, wood and waste) electric sources in 2001.  Cuba produced approximately 0.8 billion kWh of renewable power while Jamaica generated 0.1 billion kWh. The Dominican Republic was the largest producer of hydroelectricity in the Caribbean, with 0.7 billion kWh.  This was greater than hydropower produced by Cuba, Haiti, Jamaica, and Puerto Rico combined.

Source: Oil and Gas Journal, December 23, 2002 and company sources.
* Source: EIA Petroleum Supply Annual 2001.

For more information from EIA on any country in the Caribbean, please see:
EIA Country Information

Links to other U.S. government sites:
U.S. State Department Information on Caribbean Countries
Embassy of the United States to the Eastern Caribbean
U.S. Census Bureau

The following links are provided solely as a service to our customers, and therefore should not be construed as advocating or reflecting any position of the Energy Information Administration (EIA) or the United States Government. In addition, EIA does not guarantee the content or accuracy of any information presented in linked sites.

University of the Virgin Islands Energy Program and Renewable Energy Institute
Renewable Energy in Latin America and the Caribbean
Grenada Electricity Services
CARILEC -- The Association of Electric Utilities in the Caribbean area
CARICOM - The Caribbean Community
The Organization of American States
Official Home Page of the Free Trade Area of the Americas
Caribbean Utilities Company - Cayman Islands
Jamaica Public Service Company
Dominican Republic's Embassy in the U.S.
Trade Point Port of Spain
Petrotrin
Ministry of Energy and Energy Industries (Trinidad and Tobago)
Atlantic LNG Company of Trinidad and Tobago
BP Trinidad and Tobago
BG Group Trinidad and Tobago
Puerto Rico Electrical Power Authority (PREPA)
AES Ocean Express

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File last modified: June 3, 2002

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