The oil and gas sector has fuelled Trinidad's economic growth

In July, US-based petroleum consultant Ryder Scott released a new audit showing that the country's proved gas reserves stood at 14.4 trillion cubic feet (tcf) last year, down from 15.4 tcf a year earlier.

Trinidad and Tobago and Venezuela on Monday signed a deal to develop natural gas reserves on their maritime border.

The accord gives Venezuela 73% and Trinidad 27% of the 10 million tcf certified reserves of the Loran-Manatee gas field, which spans the eastern part of the border.

First accord

"For Trinidad, this means the continuity of their extraordinary plans for natural gas development," Venezuelan Oil Minister Rafael Ramirez said after the signing.

"Trinidad has been a pioneer in this sector for our continent, and for Venezuela this means we will be able to have access to the quantities of gas we have on our side," he said.

Trinidad and Tobago's Energy Minister Caroline Seepersad-Bachan had earlier called it the first agreement of its kind in the region.

"(It) speaks volumes for how much we as nations and as an entire region have matured in our cross-border relations," she said.

Gas has outstripped oil in its importance to the two-island nation's economy, based largely on significant reserves discovered in the early 1990s.

But successive audits suggest that proved reserves are falling, partly the result of a slowdown in investment.

"Low domestic gas prices, along with delays in the signing of new contracts and the implementation of a new fiscal regime have been regarded as deterrents to new investment in exploration," analysts Global Insight said in a May commentary.

Incentives

Ms Seepersad-Bachan said the deal with Caracas was very important in helping in her country's production and refining of gas.

But much more investment is needed and the government is said to be looking at a new package of incentives.

The CEO of BP Trinidad & Tobago (BPTT) said earlier this year that US$8-10billion will need to be invested in exploration in Trinidad and Tobago over the next five years in order to maintain current oil and gas output levels.

BPTT, a subsidiary of BP, is the largest natural gas producer in the country.

The oil and gas sector is the largest single earner of export revenue for Trinidad and Tobago, contributing more than 50% of total government revenues and about 45% of Gross Domestic Product.