Home' Trinidad and Tobago Guardian : September 25th 2014 Contents SEPTEMBER 2014 • WEEK FOUR www.guardian.co.tt BUSINESS GUARDIAN
ENERGY | BG9
State-owned Petrotrin is
promising to increase its
crude production in the
upcoming fiscal year with
an additional 6,000 barrels
of oil per day out of its
South West Soldado field.
In an interview with the Business
Guardian, company president Khalid Has-
sanali said already Petrotrin has started to
ramp up production and he expects this will
continue in 2015.
"We are already in South West Soldado.
Our production is in the vicinity of 2500
barrels of oil per day bo/d," Hassanali said.
"So we are already getting some oil out of
it and by the second quarter next year we
will have at least doubled that," Hassanali
The South West Soldado field reactivation
project is a considered a critical exercise at
Petrotrin as the organisation tries to increase
local oil production in keeping with a prom-
ise made by Energy Minister Kevin Ram-
narine to increase indigenous crude.
This project which is one of the largest
exploration and production projects under-
taken by the organisation within recent
times is expected to provide Petrotrin with
an opportunity to take advantage of the rich
assets in South West Soldado that have been
lying dormant for roughly 25 years.
It comprises three phases.
In the first phase, the company will install
a temporary facility and design a permanent
facility for production in South West Sol-
dado. The company will also drill eight wells,
reactivate off wells, and install a new gas
sales line. Petrotrin said it has already
installed a temporary floating production
facility, refurbished 23 structures, and drilled
In phase 2, Petrotrin aims to scale up
facilities and infrastructure while engaging
in sustained drilling and workovers. The
company will also replace/upgrade the exist-
ing bulk line. The third and final phase will
involve the maintenance of peak production
by drilling and workovers.
According to Petrotrin, "The South West
Soldado Development project was commis-
sioned to revitalise and develop the pro-
duction from the South West Soldado field.
The field is divided into three phases and
it included the reactivation/workover of
existing wells, the drilling of new wells and
the provision of refurbished and new infra-
So far, Petrotrin has already spent $0.5
billion on the project which is crucial for
its refinery as it continues to suffer in part
from a lack of domestic crude.
Petrotrin said, "The cost as at the end of
fourth quarter 2014 was approximately $500
million, inclusive of drilling and infrastruc-
Petrotrin has blamed the shale revolution
in the United States and lower crude prices
at Cushing, Oklahoma, for its decision to
significantly reduce its refinery throughput
to 120,000 bo/d from 180,000 bo/d.
Refineries in both Aruba and the US Virgin
Islands have been shuttered as Caribbean
refineries are facing higher prices for crude
on the international market than many US
refineries, which are benefiting from the
continued bottleneck at Cushing.
Mado Bachan, Petrotrin vice-president
of refining and marketing, said there are
significant challenges now facing the com-
pany s R&M business. He explained that
Petrotrin has imported 60 per cent of the
crude needed for refinery feedstock, while
40% of the crude has come from domestic
Bachan explained that with global spare
refinery capacity averaging nearly 20 million
bbl of refined products in 2014, it puts a
cap on margins.
He said, "It s your gross margins that
affect your profitability, because it is from
your gross margins that you have to find
money for your operating costs including
utilities, inputs, labour, and so on."
Bachan said the closure of refineries in
the Caribbean was not necessarily a global
trend because there continues to be con-
struction of modern, highly efficient refiner-
South West Soldado to
produce 6,000 barrels in 2015
The future of Argentina s petrochemicals sector
will depend largely on the government, according
to the head of Brazilian petrochemicals consultancy
MaxiQuim, Otavio Carvalho.
The state will need to enact transparent and
investment-friendly hydrocarbon reforms to ensure
a steady supply of feedstock.
"Overall, what a petrochemicals company needs
is a constant flow, a significant amount of hydro-
carbons into a separation unit and into a cracker,"
Carvalho told BNamericas. "No one s going to put
any money in Argentina unless they [are sure] that
this flow will be constant and not be curtailed in
A steady decline in hydrocarbons production led
to a shortage of feedstock in the first decade of the
21st century, Carvalho explained.
But as the Vaca Muerta shale reserves become
more available, the potential for a rejuvenated petro-
chemicals sector is there.
"The history is that they re short on ethane,
they re short on methane (and) they re short on
power," Carvalho said. "And as soon as they resolve
their energy situation, there will be lots of oppor-
tunities for Dow to explore the ethane that is con-
tained in these large amounts of natural gas."
Carvalho cautioned that petrochemicals growth
in Argentina won t happen overnight and that it
will require new infrastructure, namely separation
"We think that in the near future---I mean in two
years---they should be much more balanced in terms
of energy," Carvalho said, "so they can start thinking
about new petrochemicals projects."
(Business News Americas)
Energy reform in Mexico will be an arduous
process, according to Luis Giusti, the former CEO
of Venezuela s state oil company PDVSA.
"Having lived through a similar process in
Venezuela, I know it s not going to be that easy. I
don t know how it will go, but certainly the oppo-
sition from PRD is putting up a lot of difficulties,"
he said at the second BNamericas LatAm Oil and
Gas Summit in Houston, Texas.
Mexico is in the midst of the biggest overhaul
of its energy sector since the industry was nation-
alised in the 1930s.
"We could see significant steps in mid-2015,
though that might be optimistic," he added.
Of those nations with opportunities to replicate
the "shale revolution" in the US, Giusti highlighted
Argentina as perhaps the most likely in Latin Amer-
"In Argentina, we are seeing a big mobilisation,
which is the closest we see to what is being done
in the US. But it is not going to be easy with the
political risk," he said.
The US has increased production by 3.5Mb/d as
a result of shale technology and is now the largest
petroleum producer in the world. Along with the
geology, it has numerous other factors that have
spurred its oil and gas growth, according to Giusti.
"Shale success in US happens not because of the
government, but despite the government. Also, it
has a strong financial system with cheap credit,
technology and human ingenuity, and low risk.
How do you replicate this in other parts of the
(Business News Americas)
hinges on energy reform
Former PDVSA head
says Mexico reform
will not be easy
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