Home' Trinidad and Tobago Guardian : January 8th 2015 Contents JANUARY 2015 • WEEK TWO www.guardian.co.tt BUSINESS GUARDIAN
NEWS | BG5
As at December 31, 2013 Sagicor had 36,547 common share-
holders, of which 43.81 per cent or 16,010 resided in T&T.
The next largest group of shareholders were Barbadians who
held 32.72 per cent of the company or 11,958 shareholders.
Asked if the fact that a majority of the company s shareholders
reside in T&T would influence the re-domicile decision to be
taken at the special general meeting, Miller said: "I don t know.
I would like to think that the shareholders, wherever located,
would be interested in the growth prospects and the financial
security of the company and if it makes sense to move to a
location which gives them the best options going forward,
they will support it."
Miller said that, at this point, Sagicor s shareholders invest
in a company domiciled in Barbados but he said he believed
they would support the company being domiciled elsewhere
once they are given good reasons.
Sagicor has a 12-member board of which six directors were
born in or are residents of Trinidad: The Trinidadian directors
are: Jeannine Comma, Andrew Aleong, Peter Clarke, Richard
Kellman (resident), William Lucie-Smith and Richard Young.
The non-T&T resident directors are: chairman Stephen
McNamara (St Lucia/Ireland), Hilary Beckles (Barbados),
Monish Dutt (India), Majorie Campbell (Jamaica), John Shettle
(US) and Dodridge Miller (Barbados).
Asked whether it would be important for Sagicor s brand
and image that it be located in the Caribbean, Miller initially
said he did not think that was necessary.
When it was put to him that Sagicor was born in Barbados
175 years ago and always held up its Caribbeaness as a source
of pride, Miller said: "It is entirely possible that a company
that is born in the region, may grow to the point where it has
outgrown the capacity of the region for further development
and it may be strategic, while not losing your heritage, to
domicile somewhere else.
"There are many American companies that are domiciled
in Bermuda and the Cayman Islands and they have not lost
their connection to the US.
"Why would it be seen that we have lost our connection
to Barbados because we have strategically---for ratings, for
capital and various reasons---decided to have a domicile some-
where else, when we will continue to be very well connected
to the region through our operations?"
Re-domicile linked to growth
Miller said part of the thinking behind the re-domicile drive
was that doing so would enhance the company s ability to
grow in the future.
On the issue of Sagicor Financial s need for capital, Miller
said the US$150 million bond matures in 2016 and it would
need to be refinance, which would be significantly cheaper
if done in an investment-grade jurisdiction.
He added: "We have opportunities for growth going forward
and those opportunities need to be funded. We will at some
point be raising capital to fund future operations.
"We are looking at opportunities outside the region and
your rating, while it may not be critical for a transaction in
the region, tends to be extremely important for transactions
outside of the region."
He said the Government of Barbados is aware of the com-
pany s thinking with regard to the re-domicile issue although
the Fruendel Stuart administration has not been formally
engaged in a discussion on the matter.
Asked if the management presented the board with a financial
rationale for the recommendation to leave its place of domicile
after nearly 175 years, Miller said that he was not willing to
go through the process by which the board made the deci-
"But I would tell you that it was a well thought out rec-
ommendation to the board, based on what we see, what we
know and where the company is at and our growth prospects
"As a result, the board unanimously supported the recom-
mendation of management."
Given the long and continuous connection between Barbados
and Sagicor---which was previously known as Barbados Mutu-
al---Miller acknowledged that the process of putting the redomi-
ciling recommendation to the parent board was difficult.
"Emotionally, even in making the recommendation to the
board was not an easy thing. As you said, we have been con-
nected to or associated with Barbados for 175 years. But we
have to separate what are the strategic options available to
the company to allow it to continue to support the Caribbean
and what is an emotional event.
"Once we get pass the emotion and realise that the rationale
was there to support the move and it does not mean that you
are not connected to or associated with Barbados and the
Caribbean, then we were able to find a path forward."
Continued from page 3
Sagicor shareholders to vote on re-domicile
The Republic of Trinidad and Tobago [T&T]
is located just seven miles north of Venezuela,
and is loaded with natural gas. In 2013, the
republic was the sixth-largest LNG exporter
in the world. BP Trinidad and Tobago [bpTT]
is the largest natural gas production in the
country. The company is 70 per cent owned
and operated by BP, and Repsol owns the
remaining 30 per cent.
Last year, bpTT produced 2.25 Bcf/d of nat-
ural gas, equivalent to 375,000 BOE/d. Accord-
ing to bpTT s webiste, bpTT is responsible for
17 per cent of BP s total output, making it an
important part of its growth proposition to
In 1996, the Corallita and Lantana natural
gas fields were discovered 50 miles southeast
of Trinidad. The two fields are estimated to
hold 1 trillion cubic feet of proven natural gas
reserves, located 330 feet to 360 feet below
the water. Through the Juniper development,
which was sanctioned on August 13, BP and
Repsol plan to bring natural gas production
from these two fields online.
Fabrication of the offshore production facil-
ity, which will support production in the area,
began in the fourth quarter of last year. Natural
gas output from the development will be sent
to the Mahogany B platform through six miles
of underwater natural gas pipelines. Drilling
on the five subsea production wells that will
tap into the two fields will begin sometime
this year. First gas is expected in 2017. The
Juniper development has the capacity to pro-
duce 590 MMcf/d, and is guided to pump out
a peak rate of 555 MMcf/d of natural gas.
Converted into barrels of oil equivalent,
assuming one BOE equals 6,000 cf of natural
gas, the Juniper project will have a peak pro-
duction rate of ~92,000 BOE/d. At that rate,
the Juniper development will add ~64,400
BOE/d to BP s production base. Once oper-
ational, the Juniper development would grow
BP s Q3 2014 production levels by 3 per cent.
Investors should be aware, however, that
the peak rate won t last for long. The two
fields would run out of natural gas reserves
in five years (1 Tcf of natural gas / 555 MMcf/d
/ 365 days in a year = 5 years) at the estimated
peak production rate of 555 MMcf/d. This
means that unless more natural gas is discov-
ered in the Corallita and Lantana fields, the
decline in pressure (due to the gas being
extracted) will result in lower overall production
levels pretty quickly. On a positive note, bpTT
has been known to find additional natural gas
reserves in fields that are already producing.
To keep expanding its production base, bpTT
has been exploring the area to locate new
resources to develop. In 2012, bpTT announced
that it had discovered an additional 1 Tcf of
natural gas in the Savonette gas field. This
doubled its proven reserve base in the field to
2 Tcf, substantially extending the life of the
field. It also allowed bpTT to bring additional
production wells online and boost bpTT s pro-
duction rate. After the Savonette-4 well was
completed, the Savonette-5 and Savonette-6
wells were brought online and are currently
producing. In 2014, bpTT began working on
the Savonette-7 well, which will provide pro-
duction growth in the future.
Another major source of upside is coming
from bpTT s Ocean Bottom Cable Seismic
Survey of the Columbus Basin, which houses
all three of the previously mentioned fields.
After the seismic survey was completed,
bpTT noted that there were more resources
that previously thought in the Angelin Field.
Andre Celestine, one of bpTT s vice presidents,
had this to say about the survey: "Better def-
inition of reflectors, faults, and imaging deep
and below shallow gas have all been part of
the significant uplift.
"These new data have already resulted in
significant additions to proved reserves in
Angelin field and is allowing bpTT to progress
the field into our projects organization to plan
Originally, bpTT saw the Angelin Field hous-
ing 1.5 Tcf of recoverable natural gas. Now
that the seismic survey is complete, bpTT sees
significantly more natural gas in the field.
Once the evaluation of all the seismic data
is complete, it wouldn t be unrealistic to assume
BP and Repsol will move forward in developing
the Angelin Field. Considering the reserve base
of the field, the development could have a
peak production rate that exceeds the rate of
the Juniper development.
Many analysts and government officials
were worried that Trinidad and Tobago s E&P
industry wouldn t be able to support existing
production levels. Last year, T&T produced
1.45 Tcf of natural gas yet replaced only 0.58
Tcf of that through new reserves, a trend that
has been present for over a decade. Through
bpTT s efforts, those worries can be put to
rest. By discovering more natural gas in the
Savonette and Angelin fields, bpTT has opened
up new growth opportunities to capitalize on.
After the disaster in the Gulf of Mexico, BP
announced that its bpTT operations would
undergo substantial amounts of maintenance.
From 2011 to the end of 2013, bpTT underwent
a period of above normal levels of maintenance,
which curtailed production levels as several
of its major offshore production facilities were
taken temporarily offline. Now that bpTT has
upgraded its offshore facilities and infrastruc-
ture, it can focus on growth through exploration
efforts and new developments. Completing
the Savonette-7 well and bringing the Corallita
and Lantana fields online will significantly
boost bpTT s production base and BP s overall
T&T upside creates opportunity for BP
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