oil. Under Prime Minister Patrick Manning, the present government's tax reform began in July 1992. New and reduced tax rates, including the SPT, became effective in late 1992. 11 The government also encourages the participation of private/ foreign sector in oil and gas development, both upstream and downstream, by reducing the state involvement in certain projects.
Despite all of the dilemmas and problems discussed above, there is much hope for Trinidad and Tobago's hydrocarbons sector. First of all, the country's natural gas resources have a bright future. The planned LNG plants to be established by British Gas and Amoco Trinidad are worldscale. Potential markets for LNG include the United States, Europe, Puerto Rico, Panama, Brazil, and other Caribbean countries. The government could earn substantial amounts of foreign exchange through exports of natural gas through pipelines or as LNG.
Secondly, the role of Trinidad and Tobago in the regional petroleum product market can be greatly enhanced if the refining sector can indeed be revived under the new policies. To achieve this goal, the government needs to pay more attention to the refining sector. Increasing the utilization rate of current refining capacity and upgrading the refineries are among the many things that the government can do. If not all of the indigenous crude can be used in the refineries because of unsuitable qualities, Trintoc could import substantial amounts of crude to feed its refineries and to make the expensive program of refinery upgrading economically justifiable and feasible. The government recently began focusing its attention on the issues of refinery upgrading and natural gas development. It expects to double its secondary refining capacity by the mid-1990s and is now actively seeking a partner with adequate crude oil supplies to cooperate in the program.
We believe that Trinidad and Tobago will continue to benefit from its oil and gas resource endowments and its established hydrocarbons sector. Should it take advantage of its geographical location and substantial natural gas reserves, as well as underutilized refining potential, Trinidad and Tobago could become a very important link for the refined oil, petrochemicals, and LNG trade between North and South America.