Home' Trinidad and Tobago Guardian : July 11th 2013 Contents JULY 2013 • WEEK TWO www.guardian.co.tt BUSINESS GUARDIAN
ENERGY | BG9
The massive natural gas reserves that are jointly shared
between Venezuela and T&T will only be developed if and
when the Venezuela republic s state-owned company Petroles
de Venezuela SA (PDVSA) makes the project a priority.
This is the view of Anthony T Bryan, professor/senior fellow
at the Institute of International Relations, UWI, St Augus-
In an interview on Tuesday, Bryan said the announcement
that the joint steering committee will continue its work was
welcome news from Venezuela s new President Nicolás Maduro
Moros, but said the real issue is whether PDVSA is interested
in the gas.
"Venezuela is 15 to 20 years behind T&T in terms of their
development of liquefied natural gas (LNG). They use most
of their gas for domestic consumption. In that respect, unless
PDVSA is serious about the development of the Loran-Manatee
field, I cannot see how it can progress. Of course, it does not
cost the Venezuelans anything really to allow the gas to be
jointly developed while earning the country goodwill," Bryan
At least one source in the Venezuelan government told the
Business Guardian there was a mixture of economic, political
and personality issues which has prevented the more than ten
trillion cubic feet of gas in the Loran/Manatee field from being
The Venezuean source indicated the country needs the gas
to develop its west coast, but that building the pipeline was
too costly. If it could not build its own pipeline, the Bolivarian
Republic would then have to pass the more than seven trillion
cubic feet (tcf) of its gas through the T&T grid and that could
have posed a political problem for the Venezuelan government.
There has also been the challenge of the late President Chavez
relationship with Port-of-Spain.
"Some of you all may know that the late president did not
have particularly warm relationship with the former prime
minister of your country. The cooling of relations really hap-
pened with the Petro Caribe initiative, which T&T did not
subscribe to and which the Venezuelan press portrayed as a
rebuff and embarrassment to the late president. Mr Chavez
did not take kindly to it and, as a result, did not use his pres-
idential office to push the process along, although it is also
true to say he did not discontinue the efforts," the source told
the Business Guardian.
The unitisation agreement
It was on August 16, 2010, less than three months after
Patrick Manning ceased to be prime minister and a new gov-
ernment came to power that Venezuela and T&T were able
to sign the unitisation agreement that had been negotiated
for more than three years.
That agreement which the Business Guardian has been pro-
vided a copy of clearly determines the amount of gas available
and how it is to be used.
It reads in part: "The agreement establishes legal principles
and procedures which shall govern the exploitation and devel-
opment of the hydrocarbon reservoirs within the unit area of
the Loran-Manatee field as a single unit."
There appears to be corroboration with information from
the source in Caracas with sources in T&T s Ministry of Energy
and Energy Affairs who told the Business Guardian the main
decision still to be made is where the gas will go.
The Business Guardian has learnt there were several options
The first option was for Venezuela to build its own pipeline
and take its gas from the Plataforma Deltana region, around
Trinidad and then to Guiria, but this was proving not to be
The second option was using the National Gas Company s
cross-island pipeline and then building a spur from Trinidad
The third was utilising the gas in LNG by the construction
of the elusive Train X.
Lacking in tact
A member of T&T s team on the joint steering committee
told the Business Guardian that two of the options have political
challenges and the situation had been made more difficult
with the lack of tact and diplomacy by "certain individuals"
who told Caracas that T&T wanted the gas to come to this
country, unaware of the sensitivities since Venezuela has a
clear policy that its natural resources are for the development
and use of the people of Venezuela.
Last week Energy Minister Kevin Ramnarine called for
greater collaboration and partnership between T&T and
Venezuela in the area of natural gas development with a view
to expanding the natural gas market in the Caribbean and
Addressing the Second Gas Summit of the Gas Exporting
Countries Forum (GECF) convened in Moscow, the Russian
Federation on July 1, Ramnarine expressed his commitment
to work together with Venezuela, particularly in the development
of the large natural gas reserves in the Plataforma Deltana
area. Both Venezuelan President Nicolas Maduro and Energy
Minister Rafael Ramirez were present while Ramnarine
addressed the summit.
field up to Venezuela
Repsol SA, Spain s largest oil producer, delayed
starting to explore for shale gas in the north,
where a local government has outlawed drilling
projects that use water-intensive hydraulic frac-
The company had targeted July to begin seismic
studies at its Luena project that extends over 290
square miles across the Cantabria region, where
energy trade groups say Spain s richest shale gas
deposits lie. Repsol s first domestic shale search
can t begin yet because several "requirements"
haven t been met, according to a company official
who requested anonymity, as no announcement
has been made. He declined to give specifics.
In April, the Cantabrian government enacted
Spain s first ban on the use of hydraulic fracturing,
or fracking, blaming risks of polluting drinking
water. The rule blocks companies seeking to blast
water into shale deposits within the region s
boundaries, though it s less clear how projects
extending to other regions are affected. Luena
stretches from Cantabria to Castille and Leon, a
situation that normally would be regulated by
the nation s Industry Ministry, exploration com-
Spain has enough prospective natural-gas
resources to satisfy more than 70 years of domestic
demand, according to the Spanish fossil fuels
trade group Aciep. That has prompted government
proposals to reinforce environmental safety meas-
ures while at the same time ease the way for
international oil and gas companies such as Cana-
da s BNK Petroleum Inc and San Leon Energy
Plc to produce the commodity, cutting Spain s
dependence on imports and potentially lowering
local energy prices.
A recent draft law pushed by Industry Minister
Jose Manuel Soria seeks to add fracking to a
national hydrocarbons law that forces all com-
panies that want to use the fracking "stimulation"
technique in shale to submit environmental impact
studies. Simultaneous efforts by the Agriculture
Ministry seek to shorten the time frame in which
environmental studies are done.
Repsol s Luena project was licensed in 2011 for
six years during which the company is required
to invest at least 30 million euros (US$39 million)
The area s resource potential will also be exam-
ined through shallow and deep test wells, accord-
ing to a February report Repsol commissioned
from engineering consultant URS. The Madrid-
based company was set to start searching for gas
in July, according to the report. (Bloomberg)
Repsol delays first shale gas
project in Spain after frack ban
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