Trinidad and Tobago energy company TTNGL attributed its dip in 2019 profits to heightened production of crude in the United States, which, it said, created a glut for the commodity and in international markets while dampening the price.
In its annual report, TTNGL Chairman Conrad Ennill wrote, “This unprecedented growth in the global supply of crude oil, natural gas and natural gas-based products, contributed to the oversupply of petroleum products in 2019 without a corresponding growth in demand. These economic factors were the primary contributors to the price volatility which ultimately affected the Trinidad and Tobago market and is reflected in our results for 2019.”
The increased production of US crude conversely means that that country’s import of oil from Organisation of Petroleum Exporting Countries (OPEC) would have fallen, Ennill explained. Notwithstanding, this led (OPEC) and its partners to reduce their output.
This is one of the main reasons the TTNGL chairman offered to substantiate the sharp dip in his company’s profit after tax for 2019, which fell to TT$129.5 million — or TT$123.5 million less than in the previous financial year.
TTNGL reported a net income of TT$91.6 million, or 167 per cent lesser than that recorded in 2018.
Of significant note, auditors at Deloitte and Touche point out that TTNGL earns most of its income from its joint venture Phoenix Park Gas Processors Limited (PPGPL), which represents 96 per cent of its assets.
Ennill, in his report to shareholders, noted that the joint venture company also felt the impacts of excessive gas production in North America and trade war between the US and China.
Looking ahead, the chairman is optimistic about TTNGL’s future prospects as the company “aggressively” pursues its growth strategy. It is also looking forward to reaping from PPGPL’s acquisition of Twin Eagle Liquids Marketing LLC in the first quarter of 2020.
The company’s net assets declined slightly, with its investment in joint venture increasing by TT$36.7 million and cash and cash equivalents TT$ reduced by TT$148 million.