Home' Trinidad and Tobago Guardian : October 17th 2013 Contents BP believes its two deep water blocks which
were awarded to it in 2011 contains natural
gas rather than crude oil.
This is the assessment made by BP PLC s
chief executive Bob Dudley in an interview
with the Business Guardian. Dudley said while
the company would like to see oil, it believes
the blocks contain natural gas.
"What we will like to find would be oil but
I think the geologists think it s a gas prospective
area, but for me, that is for the explorers to
find. We will see and I think it s great that
those blocks are being explored," Dudley said.
BPTT was awarded 100 per cent interest
in Blocks 23(a) and Block 14, both in deepwater
frontier acreage under production-sharing
contracts. BPTT was a sole bidder for Block
14. The firm beat out bids from Niko Resources
and a consortium of BHP Billiton, Repsol-
YPF SA, and Total SA for Block 23(a).
Block 23(a), which lies 300 kilometres
northeast of bpTT s Galeota Point operations
base, covers 2,600 square kilometres in 2,000
metres of water. Block 14, which lies next to
Block 23(a), covers a further 1,000 square
kilometres also in 2,000 metres of water.
The awards doubled the acreage held by
BP-controlled companies in T&T. BPTT holds
exploration and production licenses covering
904,000 acres in areas off T&T s east coast.
Energy consultant, Helena Inniss-King,
who put together the bid round in which
bpTT was awarded the blocks, said the Min-
istry of Energy was of the view the blocks
were both oil and gas prone. She said: "We
always had the view that there would be both
oil and gas, a view shared by a lot of the com-
panies to whom we spoke. If it is only gas,
then there would be issues bringing it to shore,
but mainly for other operators who have to
start from scratch. BP has a lot of infrastructure
and would have the capacity to move the gas,
therefore, investment would be incremental.
Still substantial, but bpTT is of the view they
can make it work."
Petroleum consultant Dr Krishna Persad
said for bpTT to have gone after and won the
blocks, the company must be convinced there
is "big gas". He said large volumes of gas in
the deep water may work because there is no
supplemental petroleum taxes on gas nor on
"If there is condensate, then it makes it
even more attractive. So I think there will be
a need to find big gas because the price of
gas globally is unlikely to increase significantly
because the world is awash with natural gas.
However, if it can be produced profitably at
today s prices, then that will be fine," Persad
BP s chief executive said it was important
that the T&T Government continues its policy
of ensuring the local energy sector is com-
petitive if it is to maintain or increase its level
He said, "BP does work around the world
and an observation that I have is that more
and more are becoming very short term in
terms of their thinking in terms of cycles, and
I would just say one of the things that is going
to keep T&T strong is the thinking of the
decade ahead and how to make sure the indus-
try competes in a terribly competitive world.
"I am impressed about the forethought
about how to keep T&T competitive in a ter-
ribly competitive world and there are many
others who are not thinking long term, and
so they want to maximise taxes right away
and then the investment falls off and if you
don t think long term, then you can have a
BPTT accounts for more than half of the
nation s natural gas output and 17 per cent
of BP s global oil and gas production.
Its total production averages 420,000 boe/d,
comprised mainly by natural gas and natural
Natural gas price increases
Only recently BP PLC s chief economist
Christof Ruehl said natural gas prices in the
United States are likely to increase between
30 and 40 per cent over the next two years.
In an interview with the Business Guardian,
Ruehl said the low price environment in the
US is being reinforced by the large price dif-
ferential between crude oil and natural gas.
Ruehl said this had led to many companies
moving away from dry shale gas to tight oil,
but that had not reduced natural gas produc-
tion since there was significant associated gas
with tight oil.
He said with the US likely to become an
exporter of natural gas by 2015/2016, he
expects the demand for and price of gas to
"What we should also see is the demand
for gas picking up from the carbon using indus-
tries where, in power, you have this big com-
petition with coal. So we will think prices are
set to move a bit higher than where they are
today. But I will not expect a return to what
we saw in the 1990s," Ruehl told the inter-
national publication, the OIl and Gas Journal.
BP s chief economist said it is the power
sector in the US that drives natural gas prices
and last year there was a record increase in
the use of natural gas in power generation
replacing coal. He said the price of coal will
also be a factor in determine natural gas
demand and therefore natural gas prices.
Ruehl said, "Last year in the power sector,
what we saw was the largest increase in a
single fuel for at least 40 years. Last year
natural gas in the power sector increased 20
per cent, coal decreased 12 per cent, and that
came on the back of the last five years where
natural gas in power generation increased on
average by 6.5 per cent. Last year there was
a large supply of natural gas and that brought
the prices down to US1.81 and that made it
competitive with coal."
Ruehl said an increase in the price of natural
gas continues could lead to a slowdown in the
replacement of coal by the power sector.
OCTOBER 2013 • WEEK THREE www.guardian.co.tt BUSINESS GUARDIAN
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BP's Dudley: Deepwater blocks may only have gas
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