Home' Trinidad and Tobago Guardian : October 23rd 2014 Contents OCTOBER 2014 • WEEK FOUR www.guardian.co.tt BUSINESS GUARDIAN
ENERGY | BG9
State-owned Petrotrin will
have to seek out alternative
sources of crude if workers
continue to be afraid to
service West African vessels,
said the company s Presi-
dent Khalid Hassanali.
This is likely to be a major challenge to
Petrotrin as almost half of all the crude
imported to run the Petrotrin refinery comes
According to the latest statistcs from the
Ministry of Energy and Energy Affairs for
the period January to August 2014, Petrotrin
imported 7.3 million barrels of crude from
the West African country. This is a total of
13.2 million barrels imported.
In an interview on Tuesday, Petrotrin s
president said the company favoured the
crude from Gabon because of its cetane
content, but would have to make decisions.
He said; "We import from Gabon because
we need the cetane that we get from their
crude to mix with the crude that we produce
locally so we can get to make the blends.
In those circumstances, we will have to look
elsewhere if the workers continue to service
the vessels. Even though Gabon is not on
the list that has been put out by the Ministry
of Health, we have some options, but this
also has to be a commercial decision."
The Government has banned individuals
from four West African states---Sierra Leone,
Guinea, the Democratic Republic of Congo,
Liberia, and Nigeria---from entering the
country and has decided to quarantine locals
who travel to those countries for up to 21
The move to include Nigeria in the ban
has sparked outrage among some people,
in particular nationals working there.
In an open letter to the media, Thedore
Taylor, who is a geologist and petroleum
engineer and a friend of Energy Minister
Kevin Ramnarine, wrote, "On a more per-
sonal note, has the Government researched
and identified the number of T&T citizens
working in West Africa? Do they have the
facilities to put in quarantine the number
of returning nationals who live and work
in West Africa?
"Do they realise that they are indeed cre-
ating a situation of increasing the risks of
the disease actually spreading by their sense-
less actions as they put a large number of
people in confinement (with less than one
per cent chance of someone even having
the disease) and allowing the odd chance
of one person infecting several others? Are
you not denying rights as a citizen of the
country if I am not ill to place me in con-
finement? Of course, if I am to return, I
shall definitely challenge such illogic and
stupidity in court. How can I work and
in confinement for no obvious sensible rea-
Taylor has been working in Nigeria for
the last four years and is the divisional
general manager at Downhole Services Ltd,
a well-known service company. Before
that he was a consultant in Trinidad and
operations manager at Halliburton
He explained that he would often visit
Trinidad during the Christmas/Carnival
period and was now effectively being told
that should he return, he will be placed
under a "version of house arrest" at a time
when Nigeria is declared Ebola free while
no one from the US is banned, although
there have been Ebola cases there.
In response to e-mailed questions on
the possible effect of the ban on locals,
the Energy Chamber said while it had not
yet received any communication on the
specific measures introduced with respect
of travel restrictions from some West
African countries, other than the media
reports it can confirm there are many T&T
nationals who work in the energy sector
in West Africa, especially Nigeria. Nigeria
is Africa s largest economy, having recently
surpassed South Africa.
The chamber wrote, "Typically, these
individuals work on rotation, meaning they
work for a few weeks or a month on loca-
tion and then return for a rest period in
T&T. Their families typically remain in
T&T. These individuals contribute signif-
icant remittances to T&T s economy."
It added, "Over the past few years, the
Energy Chamber has actively sought to
develop business and trading relationships
with the energy sector in West Africa, espe-
cially Nigeria and Ghana. A number of our
member companies have business interests
in West Africa. The Energy Chamber is
proud to have two member companies
which are headquartered in Nigeria."
One of those companies trying to get
into West Africa is TOSL, a well-known
service company in the energy sector.
Its head of business development, Russell
Boodoo, said the company has developed
a partnership with a company in Nigeria
and expects to be rotating people into Nige-
ria by January.
He said the Government s decision to
place Nigeria on the ban was unlikely to
impact business, but it is an issue that
TOSL s management is considering.
Nearly three per cent of global oil production is
vulnerable to cuts if prices fall to US$80 per barrel,
making some projects in Canada, Angola, Brazil and
Norway unprofitable, the International Energy Agency
The estimate was included in a monthly report in
which the IEA also cut its forecasts for oil demand
and said prices may drop further.A tumble in the
price from the year s high above US$115 per barrel
to below US$90 has focused investors and oil com-
panies once again on the breakeven level; the point
at which net return on a project turns positive.
"All told, roughly 2.6 million barrels per day of
world crude oil production comes from projects with
a break even price in excess of US$80 per barrel,"
the report said on Tuesday.
This represents 2.8 per cent of the 93.2 million
bpd of production in the third quarter of 2014.
Some Canadian production has among the highest
breakeven rates, the IEA said.
"Canadian synthetics (oil sands) projects have the
highest percentage of production of the types exam-
ined here (about 25 per cent) that would fall into a
negative net present value if there were to be an
extended period of prices below that level," the report
Projects with high breakeven rates are scattered
around the world, however.
"Places as diverse as onshore China, offshore shal-
low-water Malaysia, Nigeria, conventional onshore
US, shallow-water UK and onshore conventional
Russia have significant amounts of high breakeven
production," the report said.
It noted that some planned, high-cost projects had
already been cancelled.
In the United States, slightly more than four per
cent of shale oil production requires a breakeven price
of more than US$80 per barrel, the IEA said.
A large proportion of deepwater exploration oper-
ations have high breakeven rates, the report noted,
though the picture is mixed.
"Some eight per cent of deepwater crude oil pro-
duction is adjudged to require a breakeven of US$80
per barrel or higher... totaling some 1.05 million bpd
or 1.1 per cent of liquid production," the report said.
"For ultra-deepwater alone (more than 1,500
metres), the results are, perhaps surprisingly, that
very little of current output from those depths, less
than one per cent, requires such a break even price."
More than 80 per cent of ultra deep-water pro-
duction is based in Brazil and the US Gulf of Mexico,
and cost discipline for these projects ensures they
tend to have lower breakeven levels than do many
deepwater projects. (Reuters)
Ebola fears may force Petrotrin
to look beyond Gabon for crude
IEA: Nearly 3%
vulnerable if oil
falls to US$80
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