Home' Trinidad and Tobago Guardian : February 27th 2014 Contents FEBRUARY 2014 • WEEK FOUR www.guardian.co.tt BUSINESS GUARDIAN
NEWS | BG9
BPTT's ocean bottom cable seismic (OCBS) has already
shown there is significant more gas off the east coast of
Trinidad than previously thought.
The recent survey has already added significant proven
reserves to its Angelin gas discovery in the Columbus Basin,
according to the company.
Angelin original estimates were just under one trillion
cubic feet (tcf) of natural gas and according to BP, the use
of OCBS, along with technology it had never used outside
of a test environment, have led to significant adjustment in
the field's proven reserves.
BPTT said, "The OBCS used Independent Simultaneous
Source (ISS) technology. This represented the first time
that BP used ISS technology outside of a test environment.
ISS uses multiple vessels to collect data, making the
process more complex, but with the potential for improved
Andre Celestine, bpTT's vice-president, operations, told
the Energy Conference held earlier this month that the
company had already begun to process the data acquired
through the survey and the early fast track processed data
has seen huge uplift in the imaging of the Columbus Basin.
"Better definition of reflectors, faults and imaging deep
and below shallow gas, have all been part of the significant
uplift. The new data has already resulted in significant addi-
tions to proved reserves in the Angelin field and is allowing
bpTT to progress the field into our projects organisation to
plan a development," Celestine said.
The Columbus Basin is a prolific oil and gas province with
more than one billion barrels of light sweet crude already
produced from it. BPTT is estimated to have more than 12
tcf of proven reserves in the Columbus Basin, having al-
ready produced more than eight tcf of gas from the basin.
Celestine said the survey has attracted interest through-
out BP because of the technology being used and the qual-
ity of the data.
He said, "The approach used by the T&T business would
help BP to plan and carry out similar surveys in its other op-
Celestine said bpTT has also added 11 million barrels of oil
equivalent from its base management project. The base
management project targets existing shut in wells and
He said the base management team focuses on under-
standing opportunities to add to production from the exist-
ing well stock.
"Significant success has been realised though system
pressure optimisation, use of surfactants and repairs to old
well stock. The contribution to production from base well
work was approximately 11 mboed in 2013." Celestine said.
He said there have been significant challenges due to the
fact that BP has been drilling in a mature province.
He listed the challenges:
• In drilling to deeper horizons, we have to drill through
sands that have been producing for years which now can-
not withstand the hydrostatic pressure of the drilling muds.
• To access new pools, we have to drill high angle, ex-
tended reach wells a long way from the platform, hence the
angles are very high.
• Lastly, we are re-entering old well bores to sidetrack to
new locations and the integrity of the old well bores has de-
teriorated over the years, making drilling more problematic.
However, he said there were three major successes:
• Savonette 4 well proved up further opportunities in the
Savonette field yielding Savonette 5, 6 and seven, which is
currently being drilled.
• We delivered reliable wells that met or surpassed
planned production numbers, and
• We have proven the tender assist drilling rig technology
is viable as demonstrated by the West Jaya on our Im-
BPTT is the country's largest natural gas producer and
produces 435,000 barrels of oil equivalent and is responsi-
ble for 17 per cent of BP's global production.
The National Gas Company of T&T Ltd s
(NGC) cash balance at the end of 2013 is
around US$2 billion ($12.82 billion), Standard
& Poor s said in a rating affirmation on Feb-
"We assess NGC s liquidity as exceptional
based on our view that sources (of cash) will
exceed uses by more than thee times (3x) for
the next 12 to 18 months. In addition, we
believe that sources would be higher than
uses, even if earnings before tax (EBITDA)
declines by 50 per cent," S&P said.
NGC has not yet published its consolidated
financial statements for the year ended
December 31, 2013, but S&P as a rating agency
gains access to the company s preliminary
S&P said NGC s principal liquidity sources
include: "Expected cash balances of about
US$2 billion as at December 31, 2013; funds
from operations (FFO) of about US$740 mil-
lion in 2014; and committed credit facilities
of US$20.8 million with Citibank."
In its consolidated financial statements,
NGC reported $12.343 billion in cash and
cash equivalents for the year ended December
31, 2013. For the year ended December 31,
2011, NGC reported having $7.229 billion in
cash and cash equivalents.
S&P expects NGC s principal cash uses to
include: capital spending of US$400 million
for 2014 and US$120 million for 2015; working
capital outflow of about US$200 million in
2014; and dividend payments of about
US$300 million, according to company s div-
idend policy of a 50 per cent payout ratio.
NGC is state-owned.
"In addition, the company s liquidity ben-
efits from the Government ownership, con-
siderable cash balance, and a manageable
debt maturity, as its largest amortisation is
due 2036," S&P said.
NGC received a corporate credit rating of
A- with a stable outlook, and an A- rating
on senior unsecured notes, S&P said.
NGC s business and financial performance
remained stable in 2013 despite some supply
shortfalls, S&P said. "We are affirming our
A- corporate credit rating on the company
and maintaining our assessment of a "very
high" likelihood of extraordinary Government
support in the event of financial distress."
The agency was not without criticism of
"We have revised our assessment of NGC s
business risk profile (downward) to fair from
satisfactory and its financial risk profile
(down) to modest from intermediate. The
stable outlook reflects our expectations that
NGC will continue to play a significant role
in T&T s economy and energy sector."
S&P said the rating affirmations follow its
regular annual review.
Giving its rationale for the rating, S&P said
the affirmation reflects S&P opinion that
there is a "very high likelihood that the gov-
ernment (rated A/Stable/A-1) would provide
timely and sufficient extraordinary support
to NGC in the event of financial distress."
As a stand-alone company, S&P said it
continues to assess NGC s stand-alone credit
profile (SACP) at BBB-.
In accordance with S&P criteria for gov-
ernment-related entities, S&P s view of a
"very high likelihood" of extraordinary Gov-
ernment support is based on its assessment
of NGC s "very important role as T&T s sole
distributor of natural gas and a key player in
the development of related industries in the
country; and very strong link with the Gov-
ernment, given its full and stable ownership
of the company."
S&P said it revised its business risk profile
on NGC to "fair" from "satisfactory" because
of S&P s reassessment of the company s
"We view its operating profitability as vul-
nerable , given its concentration in a single
line of business and the inherent volatility
of natural gas prices. Our business risk assess-
ment also incorporates our view of a mod-
erately high country risk, because the com-
pany operates only in T&T, and the low
industry risk profile of the midstream energy
sector," S&P said.
Acquisition made no difference
In August 2013, the company acquired an
additional 39 per cent share to reach a total
79.8 per cent shareholding in Phoenix Park
Gas Processors Ltd (rated A- with a negative
outlook) for about US$600 million.
"This acquisition underscores the com-
pany s business strategy to further diversify
its operations through new assets across the
natural gas value chain," S&P said. However,
the agency added, "The acquisition s effect
on the rating was neutral due to our belief
that this acquisition is in line with our expec-
tations of a continued growth in the same
S&P said it expects NGC to continue to
benefit from an increasing gas demand, result-
ing in higher revenues, given that it has a
monopoly in T&T in the provision and trans-
portation of gas.
However, during 2013, due to some supply
delays from its main gas suppliers, its volumes
dropped by 20 per cent, S&P said. The com-
pany was able to offset the impact given
higher prices of methanol and ammonia to
more than US$3.5 per million british thermal
S&P s reassessment of NGC s financial
risk profile to "modest" is based on S&P s
cash/flow leverage assessment and the com-
pany s low debt levels. Although its core
financial ratios could indicate a "minimal"
financial risk profile, the inherent volatility
of natural gas prices led S&P to assess it as
gas off Trinidad's
PHOTO: MARLON ROUSE
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