Energy economist Gregory McGuire says the latest Ryder Scott report of the nation’s natural gas reserves for 2008 is ’a good thing’ for exploration companies such as bpTT and BG, since they are guaranteed a local market for any gas they find.

McGuire made the comment even though there has been a 1.6 trillion cubic feet (tcf) reduction in proved gas reserves from 16.99 tcf in 2007 to 15.37 tcf last year.

’If someone were to go and find gas today and they look at the production-to-reserve ratio (the rate at which the proved gas is being used) and the level of consumption that’s a good thing, because the producer knows that within in a few years there is going to be a market for his gas even if no new (industrial) plants come on (stream),’ McGuire said in a telephone interview with the Express last evening. McGuire said that one should not confuse what he called the short-term issues arising out the reserves position and the long-term issue of the price of gas in the international markets.

He said that with an existing production-to-reserve ratio 1.5 tcf per year, the existing industrial plants, such as those that manufacture ammonia and methanol, will constitute a key market for at least the next five years.

During a media briefing on the Ryder Scott report at the Hyatt Regency hotel in Port of Spain yesterday, Energy Minister Conrad Enill made reference to this when asked why no estimate was given as to how many years’ worth of gas reserves are left.

’The question is if the country is involved in a programme of activity designed to ensure that the plants that currently produce ammonia, methanol are traded LNG-and we get the revenues to run the country-can continue to have a sustainable feed? The answer to that question is yes,’ Enill said,

McGuire said the only impact the latest reserve figures would have on the upcoming 2009/2010 Budget would be ’that we have to strike the right balance between risk and reward, the Government’s reward’ in the exploration and taxation business, and expressed confidence this is being done as the Government reviews its fiscal regime for the energy sector.

In addressing the challenge of extracting gas from deep water fields at a time when gas prices are very low and the cost of exploration is very high, Enill said, ’The big benefit is really going into deep (water), but going into deep requires two things. It requires technology and it requires expertise and it requires somebody with deep pockets. We have players who have those qualities and we have players who have expressed an interest in doing just that.’