Home' Trinidad and Tobago Guardian : July 25th 2013 Contents JULY 2013 • WEEK FOUR www.guardian.co.tt BUSINESS GUARDIAN
ENERGY | BG7
Explaining it has been done before and that it
is legal, three years after a consortium bid on
an oil and gas block off the coast of Tobago,
T&T s central government yesterday
announced it has accepted a "revised proposal,"
valued at US$120.5 million ($773.61 million).
The consortium: Australia s BHP Billiton and Spain s Rep-
sol.According to a press release from the Ministry of Energy
and Energy Affairs, the decision to accept the revised proposal
came after discussions "outside the ambit of the bid round."
A bid round refers to a tender-type process for oil and gas
exploration and production rights.
"The Government of the Republic of T&T has agreed to
accept the revised proposal from the consortium for a pro-
duction sharing contract for the deepwater Block 23 (b),
which is located off the northeast coast of T&T, and has
authorised the Minister of Energy and Energy Affairs (Kevin
Ramnarine) to enter into a production sharing contract with
the consortium of BHP Billiton and Repsol for the block
subject to the positive vetting by the Attorney General (Anand
Ramlogan)," a press release from the energy ministry said
The consortium of BHP Billiton and Repsol---the sole bidder
for Block 23(b)---marginally fell short of the benchmarks that
were established for the 2010 Competitive Bid Round, the
"In light of this, the Government agreed that the Minister
of Energy and Energy Affairs should exercise the option avail-
able in accordance with the Petroleum Act Chapter 62:01
to enter into discussions with the company outside the ambit
of the bid round. This option has been exercised by the min-
istry on other occasions in the past," the release added.
Those discussions---led by the Permanent Secretary in the
Ministry of Energy and Energy Affairs---were guided by the
provisions stipulated in the Petroleum Regulations (Com-
petitive Bidding) No 2 Order, 2010, and the terms and con-
ditions outlined in the Model Production Sharing Contract,
2010. "The outcome of those negotiations was the improve-
ment in the offer and the alignment with the ministry s
benchmarks," the release said.
Block 23 (b), which comprises approximately 2,600 square
kilometres and lies in water depths between 700 and 2,000
metres, is a prospective for both natural gas and oil.
"The block offers the potential to contribute to the oil or
gas reserves as well as to the future revenue base of T&T,"
the release said.
According to the ministry, "the consortium is committed
to a three-phased minimum exploration work programme
valued at US$120.5 million. During the obligatory, first phase
which runs for three years, the consortium proposes to
acquire more than 1,100 square km of 3D seismic and under-
take additional geological studies. For its second and third
phases, the consortium proposes to drill two wells, each to
a depth of 3,300 metres."
The ministry said in the release that over the next month
it "will be engaging the consortium in negotiations and
looks forward to an early award of a production sharing
contract that would signify another major thrust in this
country s exploratory efforts."
Production out of BHP Billiton s T&T oper-
ations continue to slide, according to the Australian
company s production report released on July 17
to the stock exchanges where it trades.
The New York Stock Exchange, the London
Stock Exchange and the Australian Stock Exchange
were told that, at the end of its financial year
June 30, the company s crude oil and condensate
production out of T&T fell from 1.873 million
barrels in 2012 to 1.328 million in 2013, or 29 per
cent. Comparing the same period (2012 versus
2013), its natural gas production also fell but by
only 4.7 per cent, from 38.07 billion cubic feet
to 36.27 billion.
Asked to explain the downward trend on July
18, up to press time on July 23, Carla Noel-
Mendez, the spokesperson for the local BHP Bil-
liton office, said she was still working on a
Internationally, however, BHP Billiton reported:
"Total petroleum production increased by six per
cent in the 2013 financial year to 236 million
barrels of oil equivalent and included strong per-
formance from onshore US, which delivered 99
million barrels of oil equivalent in the period."
Despite strong performance from its onshore
US operations, extended maintenance and drilling
delays at BHP Billiton s non-operated Gulf of
Mexico assets constrained petroleum production
growth, the company said.
The six per cent increase in liquids production
for the 2013 financial year was underpinned by
significant growth in Onshore US volumes, the
report said. This more than offset expected natural
field decline at our conventional assets and extend-
ed maintenance and drilling delays at our non-
operated assets in the Gulf of Mexico (US).
The liquids-rich Eagle Ford (US) is now the
largest producing oil field for BHP Billiton, as
more than 100 new wells were brought online
in the June 2013 quarter. BHP Billiton said it
anticipates "robust growth in onshore US liquids
production" again in the September 2013 quarter
as additional wells are put online and infrastructure
projects are completed.
On natural gas, BHP Billiton said: "A six per
cent increase in natural gas production for the
2013 financial year reflected strong demand at
Bass Strait (Australia), a full year of production
from our Haynesville (US) dry gas field and asso-
ciated gas volumes from the continued devel-
opment of our liquids rich acreage in the Eagle
Other extractive resources
BHP Billiton also reported on its performance
in other extractive industries.
"A strong year of production as two of our
major assets, Western Australia Iron Ore and
Escondida, exceeded production guidance and
annual records were achieved across seven oper-
ations and five commodities," the company said.
Escondida is a copper mine in Chile operated
by BHP Billiton. The Escondida mine is the world s
largest single producer of copper.
Western Australia iron ore delivered a thirteenth
consecutive annual production record as ship-
ments in the June 2013 quarter increased to an
annualised rate of 217 million tonnes, the report
Escondida copper production increased by 28
per cent to 1.1 million tonnes in the 2013 financial
year as the average copper grade mined rose to
1.4 per cent and milling rates improved.
...after Govt accepts
BHP Billiton's T&T production continues to slide
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