Energy, Economic Integration, and the Southern Caribbean
Southern Caribbean energy integration is gaining momentum as Guyana, Suriname, and Trinidad and Tobago weigh how to align new oil wealth, existing capacity, and shifting U.S. policy.
A New Push Toward Regional Integration
Earlier in March 2025, Guyana’s President Irfaan Ali stated that a jointly developed economic hub with neighboring country Suriname would be critical for “energy and food security.” Although the idea of regional energy integration has been around for a while, it has only recently gained momentum, driven by major new discoveries of oil and natural gas in Guyana and Suriname. The food issue is also important, considering that the two countries have the space to further develop agriculture and the rest of the Caribbean imports most of its food. Any vision of regional energy integration includes, in one way or another, Trinidad and Tobago, the region’s oldest energy producer. A sustained push for energy integration would further elevate the importance of the Southern Caribbean Energy Matrix, which consists of the three countries—something that Washington policymakers must take into consideration, especially with an eye to Venezuela and China.
All three countries indicate that an energy alliance is a good idea, though progress has been slow. Part of this stems from the different places each country finds itself in. Trinidad and Tobago’s oil sector is in serious decline, and its most important economic sector, natural gas, is also declining. The twin-island state did benefit from conditional U.S. waivers of sanctions on Venezuela during the Biden administration to allow a joint venture with Venezuela and BP in the Dragon Field. Indeed, the Dragon Field is regarded as highly important to reviving the country’s natural gas and petrochemical sectors.
The downturn in Trinidad and Tobago’s oil and gas production has raised considerable concerns about the economy’s future. Much of the past decade saw real GDP either contracting or barely growing, highlighting the need for diversification and new directions for the economy, which could include services and the use of its existing energy infrastructure. Indeed, Trinidad and Tobago’s energy infrastructure is impressive—ten ammonia plants, seven methanol plants, and four liquefied natural gas (LNG) facilities to process gas from the two neighbors, as well as proposing to take its 140,000 barrels per day (bpd) oil refinery out of mothballs.
Guyana and Suriname on the Rise
However, Guyana and Suriname are coming to the idea of regional energy integration from different places. Although Guyana’s hydrocarbon wealth is relatively new, it began its oil adventure without the benefit of a state-owned oil company or much infrastructure and has relied on the expertise of large oil majors like ExxonMobil and Hess. The result has been profound, with one of the world’s fastest real GDP growth rates through the last several years. As the IMF 2025 Article IV Report noted, “Rapidly expanding oil production, strong non-oil output, and large-scale public infrastructure investment supported the highest real GDP growth rate in the world, a recorded average of 47 percent in 2022–2024.”
In contrast to Trinidad and Tobago’s uncertain outlook, the IMF indicated that Guyana’s medium-term “remains highly favorable with balanced risks.” This puts Guyana in the position of considering whether it needs Trinidad and Tobago to help develop its industry or if it should go its own way with Suriname. That does not mean that close cooperation between Guyana and Trinidad and Tobago is not on the table, but rather that it may be more Georgetown setting the pace than Port-of-Spain.
As for Suriname, the Dutch-speaking country has long had a small onshore oil industry managed by its state-owned Staatsolie. The country is the latecomer of the group, only finding large-scale commercial quantities of offshore oil in late 2019 and early 2020. It is hoped that Suriname’s offshore oil will begin to flow in the next two to three years. The country does have a small oil refinery (at Tout Lui Faut), which became operational in 1997. Additional facilities will be needed for the volume of oil expected from offshore wells as well as for refining potential gas fields.
Moving Toward Cooperation Amid Lingering Uncertainty
What does all this mean?
The three Southern Caribbean energy matrix countries recognize that regional energy integration is important, considering the overlap of resources, infrastructure, and human capital. Indeed, the state-owned National Gas Company of Trinidad and Tobago (NGC) is already active in Guyana and Suriname. In June 2024, NGC and Staatsolie signed new agreements to enhance regional cooperation (including the possibility of Surinamese gas being piped to Trinidad to be refined), updating a July 2023 Memorandum of Understanding between the countries. In October 2024, high-level discussions were held in Georgetown between Suriname’s Minister of Foreign Affairs, International Business and International Cooperation, Albert Ramdin, and Guyana’s Vice President, Bharrat Jagdeo, to put more concrete measures in place for the joint development of offshore gas fields.
But will economic and energy integration advance quickly? In much of the Caribbean, there has been a historical reluctance to economic integration. Earlier integration in the British Caribbean, namely the West Indian Federation, failed, and it was much later that the Caribbean Community (CARICOM) was created and a common market approach was developed. This begs the question: will energy integration be more of a Guyana-Suriname venture, or will it have a strong role for Trinidad and Tobago?
The Geopolitical Lens
Geopolitics cannot be ignored. Considering the advent of the Trump administration, Guyana, Suriname, and Trinidad and Tobago must consider a changed geopolitical landscape. Countries with trade surpluses with the United States are at risk; Guyana and Trinidad and Tobago fall into that category. At the same time, the three Caribbean countries are pro-U.S., have strong U.S. business engagement, and share a commodity that supplements U.S. supply needs.
The United States is aware of this. A constructive policy vis-à-vis the region could help curtail Chinese influence. Indeed, in January 2025, it was announced that the Export-Import Bank of the United States signed a $527 million loan agreement to support a gas-to-energy project intended to double Guyana’s installed electric capacity. Also under discussion is the possibility of exporting crude oil to the United States for refining and then bringing back fuel for domestic supply and possibly for sale to nearby countries.
U.S. policy could also complicate regional integration, especially vis-à-vis Trinidad and Tobago’s role in the process. The Trump administration recently canceled Chevron’s waivers for conducting business in Venezuela. Will it do the same with the Trinidadian-Venezuelan joint venture in the Dragon field? As Trinidad’s Prime Minister Keith Rowley stated on March 12: “If you see us losing that U.S. Office of Foreign Assets Control (OFAC) license, as you will see in the news if that happens, then you know that your ‘coo coo is cooked.’ If you see the Venezuelans not allowing us to use the Dragon Field, then you know that we are in difficulty.”
The Road Ahead
The bottom line is that there is considerable room to deepen energy integration between Guyana, Suriname, and Trinidad and Tobago, a development that is gradually falling into place. The structure of that integration has yet to be fully formed, considering the state of play between each country. Moreover, the countries discussed here are heading into elections this year, which could result in a change of government and leadership. The advent of the Trump administration also injects a degree of uncertainty, even into the friendliest relationships. Guyana appears to be proactive in working with the Trump administration (such as considering the use of U.S. refineries and possibly setting up supply chains from the Caribbean country for bauxite and potentially aluminum). Regional energy integration is happening and has important geopolitical dimensions, but the exact contours are yet to be fully formed. Considering the state of the world, the Southern Caribbean Energy Matrix will find more strength in presenting a more integrated economic bloc rather than forging ahead separately.
Dr. Scott B. MacDonald is Chief Economist at Smith’s Research & Gradings, Fellow at the Caribbean Policy Consortium, and Senior Advisor to Global Americans.
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