Home' Trinidad and Tobago Guardian : December 17th 2015 Contents Crude oil production in T&T
fell by as much 9.3 per cent
in October compared to out-
put at the beginning of the
year, while the Consolidated
Bulletin produced by the
Ministry of Energy estimates that natural
gas production plummeted by 18.5 per cent
for the first ten months of 2015.
The ministry s data indicates that T&T
produced 83,883 barrels of oil per day (bopd)
in January, but that this declined to 76,748
bopd in October.
The document indicates that T&T pro-
duced 4.117 trillion cubic feet (tcf) of natural
gas in January, but that production had col-
lapsed to an estimated 3.474 tcf as at the
end of October, a decline of 18.5 per cent.
Put into context, the fall for the period
January to October in natural gas production
would have been enough gas to fulfill the
requirement for all the gas used by Atlantic
LNG Train 1 or enough gas to meet the needs
of all the methanol plants in the country and
more than enough for all the ammonia plants.
All this is bad news for the Government
and the country s tight fiscal situation since
most, if not all, this gas would have been
used to export either in the form of LNG or
The curtailment hurts the government
coffers both in terms of taxes on Atlantic
LNG, net back from gas exports and royalties
on gas companies and taxes on the petro-
Further, the low oil prices mean that the
Government is currently not earning any
money from the supplemental petroleum tax
(SPT) since the SPT is tied to oil prices and
companies do not pay SPT when the price
falls below US$50 a barrel.
While the national budget does not dis-
aggregate SPT, this figure can be substantial
as shown in the latest figures presented by
the Extractive Industries Transparency Ini-
tiative (EITI). According to the recently
released EITI 2013 report, SPT accounted for
$3.3 billion of government s revenues in 2013.
Contacted on Monday, Finance Minister
Colm Imbert said he was not in a position
to comment on the situation but acknowl-
edged that the fall in energy sector revenues
"It is why I did not budget a lot from the
sector because I knew the situation was
going to be grim and, therefore, revenues
from the sector are a mere shadow of what
they have traditionally been. "
A further analysis of the production sce-
nario shows that the fall in natural gas pro-
duction is as a direct result of lower output
from the two big natural gas producers: bpTT
In fact, BGTT output declined from 975
million standard cubic feet per day (mmcf/d)
to 674 mmcf/d; an almost 30 per cent decline
in production. BPTT s production moved
from 2.181 bcf/d to 1.760bcf/d or a fall of 421
Figures from the Ministry of Energy and
Energy Industries show that the country s
two other major natural gas producers EOG
Resources and BHP Billiton actually increased
their production during the same period of
time but their increases were so small it had
little chance of offsetting the massive declines
in production from bpTT and BGTT.
For the period January to October 2015,
BHP Billiton s natural gas production increased
from 379 mmcf/d to 398 mmcf/d, while EOG
went from 519mmcf/d to 587 mmcf/d.
On the oil production side, the fall is around
3,500 bpd from bpTT and another 1000 bpd
from BHP Billiton.
Prime Minister Dr Keith Rowley has raised
concern about the country s natural gas
reserves position and it has prompted the
Opposition Leader Kamla Persad-Bissessar
to call on the Government to release the
Last month, however, the Business
Guardian produced the findings of the 2014
report which is before Cabinet and is yet to
be released. That report showed that T&T s
proved natural gas reserves fell six per cent
to 11.5 tcf at year end 2014, compared with
12.2 tcf at year end 2013.
Ryder-Scott s survey showed that there
was a slight decrease in probable reserves
to 5.47 tcf in 2014 from 5.53 tcf in 2013. Pos-
sible reserves also were down, falling to 5.7
tcf at year end 2014 versus 6.1 tcf at year
When combined, the country s 3P reserves
are 22.7 tcf as of year end 2014 compared
with 23.9 tcf at year end 2013.
The survey also revealed that in the last
12 years, there has been a steady decline in
the country s proved reserves by an average
of nearly 1 tcf/year.
In 2002, proved reserves were 20.8 tcf,
probable were 8.3 tcf, and possible were 6.1
tcf for a total 3P of 35.1 tcf.
While Ryder-Scott found that 3P reserves
continue to fall, the nation s exploration
potential jumped by nearly 4 tcf to 43.8 tcf
at year end 2014. Sources say this is likely
due to the results from bpTT s ocean bottom
cable survey, which has reportedly given the
company sharper images of the subsurface
and, therefore, made it very optimistic that
it has far more gas in the Columbus basin
than previously thought.
The 2014 exploration potential is also 14
tcf more than it was in 2002.
DECEMBER 17 • 2015 www.guardian.co.tt BUSINESS GUARDIAN
ENERGY | BG9
Petrobras, the scandal-plagued Brazilian
oil giant, plans to sell off more assets
next year to offset rising debt that has
soared to five times the company s
value, its president Aldemir Bendine
"Our biggest challenge is to reconfigure the com-
pany s debt," he said at a year-end news confer-
The state oil company s debt has shot up more
than 40 per cent this year in tandem with a sharp
decline in the value of the Brazilian real against the
It now totals about 500 billion reals, or about US$
130 billion, while the company s market value hovers
around 110 billion reals (US$28.4 billion).
Bendine said Petrobras has managed to reduce
its debt in dollars by five per cent this year, but to
cut it further "there is no other way but divestment,"
which he said "will undoubtedly be broadened" in
The company s plans call for the sale of US$ 15.1
billion in non-essential assets by the end of 2016,
but it has so far refrained from putting on the block
its crown jewels; the deepwater offshore oilfields
found in what is called the pre-salt layer below the
The ballooning debt has come in a terrible year
for Petrobras, battered by plummeting crude prices
and a mega pay-to-play corruption scandal that
has tarnished its once shiny image.
Moody s last week downgraded its debt rating for
the third time this year to junk status, Ba3, leaving
open the possibility of another downgrade.
It cited "worsening governability conditions and
increased risk of policy paralysis."
Bendine said Petrobras has sufficient reserves to
weather the market s ups and downs, and that its
financial condition will strengthen in 2016.
But the company, which produces 2.1 million bar-
rels of oil a day, faces huge, looming debt payments:
more than 50 billion reals in 2016, 45 billion in 2017,
more than 60 billion in 2018 and 90 billion in 2019.
The company had planned to invest US$45 billion
in 2015, but its capital spending has been cut back
three times this year to US$23 billion.
The company s 2015 earnings will not be released
until February, but a company source said it was
expected to be in the red. AP
Petrobras to divest
more assets in
2016 as debt soars
Oil, gas output
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