Home' Trinidad and Tobago Guardian : October 22nd 2015 Contents OCTOBER 22 • 2015 www.guardian.co.tt BUSINESS GUARDIAN
ENERGY | BG7
The Government will not be able to force operators
to give up their licenses if they are not going after
smaller pools of natural gas unless those contracts
come to an end. That is the view of the person
who was in charge of managing the country's oil
and gas resources.
In an interview with Business Guardian, Helena Inniss identified
bpTT as the company with the largest acreage of underexplored
fields but said there was little the government could do.
She told the Business Guardian: "The company with the acreage
is bpTT. They have valid licenses to 2017/2018. This is not the
state company who you will remember was forced to give up all
of the land acreage from which they were not producing. Therefore
until the licences are up and the company and the government
start the negotiation process, there is no question of forcing."
The government has announced that upstream operators will
have to fully exploit their blocks or relinquish idle acreage.
Minister of Energy Nicole Olliviere told members of the Energy
Chamber that the Ryder Scott had identified 127 prospects within
the acreage currently operated by upstream operators under pro-
duction sharing contracts and exploration and production licences
and these prospects represent an unrisked resource estimated at
31.9 tcf and a risked resource estimated at 7.2 tcf. With unrisked
field sizes ranging from as low as 100 bcf to 1.0 tcf.
She said the new government would be prepared to provide
incentives where required but in an attempt to increase natural
gas production it wanted to ensure that the acreages were being
She explained: "Upstream operators shall be expected to develop
a programme of activity which exploits fully the acreage they cur-
rently hold. If the requisite programmes are not developed, the
upstream operators will be required to relinquish acreage that
This does not include any relinquishment that operators are
contractually obliged to undertake.
BPTT is expected to be significantly affected by the decision
since it has for years argued that it is exploring its acreage in the
best interest of T&T and its shareholders, however it has not been
willing to develop any field that is smaller than one tcf.
The minister acknowledged that T&T had a gas shortage and
said the situation was being made worse by a number of natural
gas negotiations that are to be resolved among the National Gas
Company, bpTT, BG Group, Atlantic LNG and a number of methanol
and ammonia plants.
Inniss said for natural gas production to increase there is a need
to increase projects with sizeable gas usage so that bpTT and
others will go out and explore for the additional gas.
"I keep saying that fiscal incentives are the final hurdle. The
most important question that a company will ask itself is after
I drill an exploration well, assuming there is a significant discovery,
can I spend approximately US$800 million or more developing
the discovery to supply 300 to 400 mmscfd, the current shortfall?"
If one looks at bpTT's development of the Savonette Field, one
well supplied that volume of gas. Therefore what is the real incentive
to go exploring and subsequently developing gas? Certainly not
tax breaks. "
Inniss continued: "Projects requiring considerable volumes of
natural gas, together with tax breaks where necessary may result
in an increase in production. However one has to examine the
problem a little differently. We need to examine the entire value
chain; the country needs to have all the players in the value chain
willing to take risks."
1. Overcapacity in the upstream
2. NGC in the mid stream willing to risk having to fulfill take-
3. The companies in the downstream willing to contract for the
name plate plant capacity
Olliviere also explained that the government was not happy
with its take from LNG exports and will be "undertaking a review
of the LNG contractual arrangements to ensure that Government
revenues under these arrangements are preserved."
Asignificant fall in crude
production from Rep-
sol's Teak, Samaan and
Poui fields is respon-
sible for eight per cent
drop in the country's oil and condensate
production in August when compared to June.
Figures from the Ministry of Energy show that in June
this year crude production averaged 81,238 barrels of oil
per day (bo/d) but by August production had plummeted
to 75,238 bo/d or an exact 6000 bo/d fall in production.
A closer examination of the figures show that Repsol's
daily production fell from 13,543 to 8,135 bo/d, a reduction
of just over 5,400 bo/d.
The significant fall in production has alarmed the new
government as it grapples with both lower international
prices for all its commodities but also with reduced domestic
In the 2016 budget presentation, Finance Minister Colm
Imbert told the House of Representatives: "The stark reality
is that oil and gas production has been on a steady decline
since 2010. Specifically oil and condensate production has
fallen from 100,000 barrels a day in 2010 to 80,000 barrels
a day in 2015, a decrease of 20 per cent.
"The August 2015 production low of 75,238 barrels of
oil per day is of particular concern. This is in stark contrast
to the glowing picture of the energy sector painted by
the previous administration. Natural rates of decline and
the absence of new discoveries are impacting on our
major economic growth drivers and our revenues. We
must, therefore, take decisive action in our energy sector,
to reverse the stagnation and decline of the last 15 years."
In her maiden speech to the
Energy Chamber of Trinidad and
Tobago, the Minister of Energy
Nicole Olliviere said the Govern-
ment was concerned that---with
the exception of the lease operators---state-owned Petrotrin
has not been able to increase output.
"With the exception of the lease operators, crude oil
production has been stagnant. State-owned Petrotrin,
which owns the rights in the most prospective land and
marine acreages, has failed to engender any significant
increase in production in its portfolio," the Minister
explained and then had a word of warning for the com-
"It is time to take a serious look at Petrotrin to deter-
mine its capability to effectively exploit its hydrocarbon
resources. The first task of the recently installed board
will be to conduct an assessment of the company's capa-
bility and to chart a way forward, understanding that
the country cannot wait forever for the company to get
its act together. The clock is counting down on Petrotrin,"
Statistics from the Ministry of Energy also show that
while natural gas production has remained relatively
stable over the last six months, it is still averaging well
below the 4.2 billion cubic feet per day that most energy
experts believe is the level required to service all the
natural gas the country needs for both domestic use and
In August, natural gas production averaged 3,848
million standard cubic feet per day mmscf/d which is
the exact average for the entire 2015.
accounts for 8% drop
in overall production
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