Home' Trinidad and Tobago Guardian : September 4th 2014 Contents It is proving increasingly difficult to attract
downstream projects, according to Frank
Look Kin, adviser to the Ministry of Ener-
gy and Energy Affairs. In an interview
with the Business Guardian following the
presentation of the Ryder Scott survey
on non-associated gas reserves on August 29,
Look Kin was asked why there has not been a
single downstream project started since the Gov-
ernment came to power four years ago.
"It is not easy to bring downstream projects
to T&T. Look, we have been working on the Mit-
subishi/Massy project and there is still no final
investment decision, so things take time," he said.
Look Kin, former president of the National
Gas Company and an adviser to successive admin-
istrations, said the country had to compete with
other areas, including the United States.
"We have to compete with shale gas in which
you have a lot of gas close to the market for the
very downstream products, so like the entire
world, we are competing for investments with
the United States."
In May, the Business Guardian reported that
T&T s efforts to attract downstream investors
could face a major challenge from the United
States as the state of Pennsylvania is seeking to
use its massive reserves of natural gas as a feed-
stock to attract significant investments down-
stream the petrochemical sector.
William Flanagan, the executive vice president
of the Allegheny Conference on Community
Development, said at the time his state was con-
fident it could attract significant investments
downstream the petrochemical sector.
He said, "In the Marcellus Shale, we have per-
haps one of the largest single natural gas forma-
tions in the world.
The United States now has the second largest
amount of natural gas reserves in the world and
we are now in a position to exploit this and to
bring gas-based industry to the state. We here
have a long history of being in energy, with the
Allegheny region spreading from here in South
West Pennsylvania to West Virginia, to parts of
New York State and parts of Maryland, and even
parts of North Carolina, so we are confident that
over the next decade you will see an explosion
of investments in the downstream sector here in
The United States Energy Information Agency
estimates that the Marcellus Shale contains 141
trillion cubic feet (tcf) of unproved technically
recoverable natural gas. In other words, those
quantities of oil and gas, which, by analysis of
geological and engineering data, can be estimated
with reasonable certainty to be commercially
recoverable under current economic conditions,
operating methods, and government regulations,
but have not been proven to exist based on accept-
ed geologic information, such as drilling .
"We see close to a US$100 billion in investment
coming to our state due to the presence of such
significant shale reserves. The reality is that we
are seeing petrochemical plants moving to our
state and we do not intend to stop at that. We
are seeing us linking manufacturing the petro-
chemical sector merging with manufacturing as
we pursue plastics and other derivatives from
the energy sector," Flanagan told the news con-
Asked if T&T should be concerned, Flanagan
said, "We all know that capital goes where it can
get the best rate of return on its investment. We
see ourselves as being able to provide a large
domestic market, cheap energy and reliable trans-
portation for that gas, so I think T&T will have
to be concerned about us and we are intent on
making the most of our recent fortune."
Since the MHTL AUM project in late 2000,
there has not been a single downstream project
that has been started. Instead, there has been a
number of announced projects, including the
controversial Sabic methanol-to-olefins project,
which was abandoned by the Saudi Arabian com-
SEPTEMBER 2014 • WEEK ONE www.guardian.co.tt BUSINESS GUARDIAN
ENERGY | BG9
Grupo Diavaz, one of Mexico s largest closely held oil service
providers, plans to sell stocks or bonds for the first time in
anticipation of new projects as Mexico opens the energy
industry to private capital.
Diavaz, which works with Petroleos Mexicanos, Petroleo
Brasileiro SA (PETR4) and China Petroleum & Chemical Corp
in Mexican fields, will hold talks with Mexican securities
exchange officials in the coming weeks with a view of debuting
in the capital markets next year, Chairman Luis Vazquez Senties
"We re going to have to be prepared for a large increase in
required financing," Vazquez, who founded the company with
his brother, said in an interview on September 1 at his Mexico
City offices. "The first possibility we are looking at is a public
offering or a bond offering. We are analysing which could be
the better option to continue growth as the market opens."
As many as 12 energy companies are considering equity or
debt sales as Mexico allows private competition in the energy
industry for the first time in 76 years, Francisco Valle, director
of promotion and issuers at exchange operator Bolsa Mexicana
de Valores SAB, said in an August 28 interview. Mexico s last
initial public offering was in June when Prologis Inc raised
Diavaz has met with Credit Suisse Group AG, Goldman
Sachs Group Inc. and Deustche Bank AG to discuss financing
options, Vazquez said. The group also plans to hold discussions
with Bolsa Chief Executive Officer Luis Tellez.
The opening of Mexico s oil and natural gas industry has
generated interest from 515 companies, Energy Minister Pedro
Joaquin Coldwell said August 22. The entrance of foreign pro-
ducers probably will generate more than US$50 billion in
private investment by 2018, according to the Energy Ministry.
Diavaz, which offers oil services primarily to Pemex and
gas production services to Brazil s state-run Petrobras in north-
ern Mexico, has been in talks with Exxon Mobil Corp about
potential partnerships in one or two of the ten fields where
Pemex is seeking so-called farm-outs or partners to increase
production, Vazquez said.
"It caught our attention that Exxon Mobil would reach out
to a company of our size," Vazquez said.
"We met and they told us that they wanted to discuss areas
where we could work together," tapping Diavaz s local knowl-
edge, he said.
Diavaz produces about 14,000 barrels of oil a day at the
Ebano field and plans to become an operator with exploration
and production capabilities, Vazquez said.
Mexico oil opening enticing driller to capital markets
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