Home' Trinidad and Tobago Guardian : June 20th 2013 Contents JUNE 2013 • WEEK THREE www.guardian.co.tt BUSINESS GUARDIAN
ENERGY | BG9
Cabinet has given approval to
the National Gas Company
(NGC) to continue its nego-
tiations with the French
energy giant Total SA for
the purchase of Total s30
per cent interest in the Angostura field.
This was confirmed by the Minister of
Energy and Energy Affairs Kevin Ramnar-
In an interview last week Wednesday with
the Business Guardian, Ramnarine said,
"Cabinet has agreed that the NGC can enter
into negotiations with Total, but, of course,
that still has to be negotiated between the
NGC and Total. You will also note there are
other shareholders in Block 2(c) and 3(a)
who will have pre-emptive rights. One of
those players is, of course,
Petrotrin...Petrotrin has said to us that they
will not exercise those pre-emptive rights."
Ramnarine said he had looked at the eco-
nomics of such a purchase by the NGC and
was satisfied it was a move in the right
"What I can say about the Total acqui-
sition is that the economics look very good
when the economics were presented to me
and we think it s a step in the right direction
to diversify the NGC, to have its own
upstream presence. Of course, they have a
small upstream presence in Teak Samaan
and Poui (TSP), but this is a step in the
right direction," Ramnarine said.
On March 14, the Business Guardian
exclusively reported that the NGC was in
the final stages of purchasing the Trinidad
assets of the French energy giant Total SA.
Multiple sources at the Ministry of Energy,
the NGC and Total had confirmed the sale
which was expected to be completed by the
end of May.
Ramnarine confirmed the NGC was work-
ing with a tight deadline if it is to complete
"The timeline is pretty tight right now.
The timeline I am told is pretty tight,
because, of course, Total wants to know
because they have other people who are
knocking on the door right now, but the
NGC is the preferred bidder."
The Greater Angostura field includes oil
and gas discoveries at Aripo, Kairi and Can-
teen. It was originally thought it would pro-
duce up to 100,000 barrels of oil per day,
but it never did and due to significant fault-
ing, production has plummeted to less than
11,000 bo/d. It also produces a minimum
of 225 million cubic feet of gas per day that
it sells to the NGC for use in the national
When the deal is completed, NGC s share
of the crude will be in the vicinity of 1,900
barrels of oil per day.
This is because under the production
sharing contract with the Government, the
partners get 60 per cent of the cargoes while
the Government gets the other 40 per cent.
It means for every 100 barrels of oil pro-
duced, the Government takes 40 barrels in
lieu of taxes by the oil companies.
The Business Guardian has been told the
natural reserves in Angostura is in the vicinity
of 1.3 tcf of gas, so the NGC could have gas
reserves from the field totalling close to 400
billion cubic feet.
The NGC s also has a 15 per cent share
in the Teak Samaan and Poui fields that is
operated by Spanish giant Repsol.
Total s decision to pull out of Trinidad
followed a failed attempt in 2011 to win the
deepwater block 23A. That block was award-
ed to bpTT after the company bid, among
other things, to drill a well in the block.
Total s bid only offered to conduct seismic
and then re-evaluate if it wanted to drill
Having failed in 2001 and 2003 to get the
same block, the company decided to pack
up shop and leave. Total s leaving also means
its small staff may be out of work unless
they are absorbed by the new owners.
The company also lost interest in T&T
after its discovery of massive oil in French
Total and its partners drilled the Zaedyus
exploration well to test whether the Jubilee
field in Ghana was mirrored in South Amer-
ica and the "Atlantic mirror" theory has
been proven with a discovery of a field that
could hold 700 million barrels in gross
reserves. That well encountered 72 metres
of so-called net oil pay.
Geologists believe when the Atlantic
Ocean started opening between South Amer-
ica and Africa, organic sediment resulted in
hydrocarbon deposits known as the Late
Cretaceous turbidite sands. They haven t
been drilled to date because they are less
visible than other types of deposits and
drilling at such depths has only recently
Energy industry sources say that Total
was now seeking to rationalise its exploration
and production commitment and T&T was
just too small to hold onto.
Cabinet gives nod to NGC/Total
talks over Angostura field
The Cabinet is expected next week Thursday
to decide if to accept the recommendations
of the Ministry of Energy and Energy Affairs
on the six deepwater blocks to be offered in
the 2013 deep water bid round.
In an interview at the signing of the pro-
duction sharing contracts for Blocks TTDAA
5, 6, 28 and 29, Energy and Energy Affairs
Minister Kevin Ramnarine confirmed that the
Cabinet note was now with the Ministry s
acting permanent secretary, Selwyn Lashley,
and will go to the Cabinet next week Thurs-
The Business Guardian has been able to
confirm that the Cabinet note recommends
blocks TTDAA 1, 2,3,7,30 and 31 be offered
for bids in the 2013 bid round. Asked if these
were the blocks that were agreed to, the min-
ister said he could not remember which blocks
they were, but acknowledged the blocks iden-
tified sounded correct.
He said the ministry was of the view that
the blocks around Block 5 were likely attractive
to potential bidders.
Ramnarine told the Business Guardian, "The
thinking by the geologists is the structure that
is there in block five most likely overlaps into
the surrounding bocks, so those blocks around
Block 5 will be high candidates to be put out.
The Energy Minister explained the thinking
was also to put out blocks that were close to
Blocks 28 and 29 which were snapped up by
BHP Billiton at the last bid round.
At a recent road show in Houston, the Min-
istry of Energy and Energy Affairs told industry
executive of the six blocks that were being
offered. Ramnarine said the road show was
very encouraging and there was even a sug-
gestion more blocks should be offered.
"Some of the feedback is that people are
thinking that its six blocks may be too little
and we were being encouraged in Houston to
put out eight blocks or more, so we are giving
thought to that. But the draft Cabinet note is
with the PS and that will be going to Cabinet
in two weeks."
Only last week Australian energy giant BHP
Billiton and the Government signed four pro-
duction sharing contracts that will see an
investment of between US$565 million and
US$1.024 billion and the drilling of six wells
in the deep waters off Trinidad.
Speaking at the signing ceremony at the
Hilton Trinidad, St Ann s, Ramnarine said a
discovery in the deep water could have sig-
nificant implications for the country s econ-
Ramnarine said, "Preliminary estimates of
the combined unrisked natural gas resource
potential of these blocks are in the range of
2.4 to 23.6 trillion cubic feet and unrisked
crude oil resources are in the range of 428mil-
lion to 4.2 billion barrels of oil. I will like us
to consider here the gravity of the moment.
The signing here today has enormous economic
potential. I would venture to say that what
we are signing here today as the potential to
radically reshape the economic landscape of
this country in coming years."
The Energy Minister said the figures had
to be looked at in the context that in the last
one hundred and five years this country has
in total produced 3.5 billion barrels of oil.
Ramnarine said the PSCs reflected the
changing global environment in which T&T
needed to ensure it got the terms and con-
ditions right. In that regard, there were changes
to the fiscal regime that allows BHP Billiton
to recover as high as 80 per cent of its cost.
The Energy Minister said there was a school
of thought that the Government should offer
shallow, mid- and deepwater blocks, but a
decision was taken to stick with what had
been successful in having a specialised bid
round for blocks in the deepwater.
The Minister of Energy and Energy Affairs
told the Business Guardian there were still a
number of open block around the country and
the idea is to mop up those open blocks so
there can be heightened activity in the
"There is interest in the southern marine
block which, if it is put out, I am sure it will
T&T has so far signed PSCs for six deep
water blocks to be explored with eight wells
expected to be drilled. Energy Reporter
...and mulls ministry's advice on 2013 deepwater bid round
Argentina and Mexico continue to have Latin
America's most abundant shale resources, but
opportunities throughout the region are vast, ac-
cording to the latest resource assessment report
from the US Energy Information Administration
Between the Neuquén, Golfo San Jorge, Aus-
tral-Magallanes and part of the Paraná basin, Ar-
gentina has world-class shale potential with
technically recoverable resources of 802Tf3
(22.3Tm3) gas and 27Bboe oil and condensates.
Development of the Neuquén basin is already
underway at the Vaca Muerta and Los Molles
formations, with the first 50 wells showing gen-
erally positive results. The Golfo San Jorge and
Austral basins have good potential but higher
clay content may pose a challenge.
In Mexico, technically recoverable shale re-
sources are estimated at 545Tf3 gas and
13.1Bboe liquids. The best documented resources
are in the Burgos basin, which holds the exten-
sion of the Eagle Ford formation.
The Sabinas basin also has abundant resources
but is faulted and folded, making recovery more
difficult, the report notes. The Tampico, Tuxpan,
and Veracruz basins have a more favorable geo-
logical structure but more modest resources.
National oil company Pemex has had mixed re-
sults at its first handful of shale wells and ex-
pects first production in 2015.
Brazil's technically recoverable shale resources
in the Paraná, Solimões and Amazonas basins are
estimated at 245Tf3 gas and 5.4Bboe liquids.
Shale development has taken a backseat in
Brazil to offshore drilling, so the full potential is
still poorly understood. The report says several
other onshore basins have shale potential, but
lack sufficient data or have unproven source
The shale future is bright in Colombia, the re-
port says, where regulator ANH is providing in-
centives for shale development after auctioning
unconventional blocks in 2012.
(Business News Americas)
EIA releases new shale
estimates for Latam
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