Home' Trinidad and Tobago Guardian : April 10th 2014 Contents APRIL 2014 • WEEK TWO www.guardian.co.tt BUSINESS GUARDIAN
ENERGY | BG9
The failure of this
country s latest
round to attract
significant interest is reflective of a view
among many companies that there is only
gas in the deep water and not crude oil.
This is according to Helena Inniss-King, former director
of resource management at the Ministry of Energy and
Inniss-King, who for years was responsible for putting
together this country s bid rounds, told the Business
Guardian that some companies appear to be in a wait-
and-see mode since they remain unconvinced the area
has oil which would make economic sense in very deep
She also argued that even if the Government went to
further incentivise the area, it may not be successful,
"I think no matter what the incentive, companies are
now in wait-and-see mode. The T&T deepwater area is
a frontier area and some companies are still not convinced
that it s an oil province. Therefore, they are waiting for
the outcome after the seismic interpretation and acquisition,"
The latest deepwater bid round failed to attract significant
interest, with four of the six blocks on offer not receiving
any bids while the other two blocks attracted three bids.
Australian outfit BHP Billiton continued its aggressive
interest in T&T s deepwater acreage with bids on T&T
Deep Atlantic Area (TTDAA)3 and TTDAA(7). BHP Billiton
submitted joint bids with BG Group for Blocks TTDAA(3)
and TTDAA(7). Spain s Repsol submitted a bid for TTDAA
(3).TTDAA (7) and TTDAA (3) are just east of Blocks TTDA
(5) and TTDAA( 6) two other deep water blocks acquired
by BHP Billiton s in 2013. BHP Billiton, which operates
the Angostura field off the east coast, has already signed
four production sharing contracts for deepwater blocks.
Like Angostura, the deepwater blocks are also off the
east coast, but not on the continental shelf, like Angostura,
and are in waters that have not been previously explored.
The T&T Government had opened the bid round on
August 17, 2013, and closed it on March 28. The successful
bidders will be expected to negotiate a production sharing
contracts with the Ministry of Energy
and Energy Affairs.
The acreage offered a mix of water
depths, hydrocarbon play-types and
production potential. Risk assessment in all of the blocks
was facilitated by previously acquired 2D and 3D seismic
data, well penetrations and the proximity of these blocks
to known hydrocarbon pools and production.
However, Energy Minister Kevin Ramnarine said the
Government will pause to do more surveys "to give us
more data on what we have out there."
Inniss-King, who is now an energy consultant and pres-
ident of the Geological Society of T&T, remains confident
there is in fact oil in the deep water. She said in the past,
the challenge was the quality of the date, but that has
since been improved.
She explained, "I have gone on record for quite a few
years trying to convince companies that the blocks are
likely prospective for both oil and gas. Their main complaint
was the lack of visibility of the Cretaceous on the seismic.
The ministry had the two seismic volumes on which the
Cretaceous was poorly imaged.
These were reprocessed. The result was a fairly good
image of the Cretaceous reflectors (the potential source
rock in the area)."
Additional seismic data may have already been collected
on the deep water, but bpTT, which more than two years
ago won bids for two blocks, has not kept its schedule as
agreed to under the production sharing contract. With the
permission of the Government, the company has been
allowed to delay its shooting of seismic to reduce costs by
jointly shooting it with BHP Billiton.
Faced with the lacklustre response, Ramnarine said this
was likely to be the last bid round for the next two years.
Inniss-King said there may be a need to look at the bid
process to determine whether it is time for a change. She
explained that when companies are not successful, they
may see it as throwing good money after bad to bid again.
Ramnarine said a decision on the award of the two blocks
will be made by June 30.
He said while he knows the process sounds long, but
it is actually very short, considering the process next goes
to a committee, which reports to the minister, who reports
to Cabinet, which approves it to go for PSC negotiation.
T&Ts crude oil production could quickly double if the Government
invests the near $1 billion required to build pipelines to take carbon
dioxide to fields in southwest Trinidad.
Dr Charles Taylor of the United States Department of Energy s
National Energy Technology Laboratory told the Business Guardian
that the Federal laboratory has done significant work in the field of
carbon capture and he believes that when CO2 is used in enhanced
oil recovery it increases recovery rates to as high as 65 per cent.
"If it is that T&T s recovery rate has been less than 30 per cent
then there is no doubt that CO2-EOR will make a major difference
in the ability to recover crude oil. In fact I will say that you already
have a ready source of CO2 from your heavy industrial plants, mainly
located in a centralised region, so it makes good sense economically
and for the environment to do this." Taylor said.
In an interview at the Federal Laboratories here in Pittsburgh Penn-
sylvania last month, Taylor said it was shown that each tonne of
carbon can produce an additional three barrels of crude oil. With the
cost of a tonne of carbon estimated at between US$40 and US$80,
and with crude prices exceeding US$100 a barrel, Taylor said it made
His views follow that of Energy Consultant Dr Krishna Persad who
for years have been pleading with the Government to instruct the
National Gas Company to build the pipeline.
Former US Energy Secretary Dr Steven Chu, who was a feature
speaker at the T&T Energy Conference held in February, said tertiary
oil recovery made sense for T&T. Chu said the country had significant
carbon that was easily captured and too much of T&T s oil was
remaining in the ground.
He said, "I have heard that close to 1.5 billion barrels of oil has
been produced on-land and that is between 15 and 20 per cent. That
is way below the global standard. Globally the recovery rates are
closer to 50 per cent, and if you have really great fields like Saudi
Arabia, it could be as high as 70 per cent."
"Now how can you do it? Well, you have large ammonia plants
here and if you are able to capture that CO2 from the ammonia plants
and use it in EOR (enhanced oil recovery), then you will produce a
much higher percentage of your reserves and, at the same time, pro-
tecting the environment. So I will urge your Government to seriously
consider doing this."
He said in some parts of Canada, it is purchased for as high as
US$80 a tonne and is still profitable.
Chu, who is also a world-renowned physicist, said this country
could also earn money from the venture by getting carbon credits
for capturing the emissions and thereby reducing the emission of
When a new oil field is discovered, production wells are drilled
into a geological formation and oil or gas is produced using the pent-
up energy of the fluids in the reservoir.
At the end of primary production, a considerable amount of the
oil remains in place, with sometimes as much as 80-90 per cent still
"trapped" in the pore spaces of the reservoir. If an oil field is not
abandoned after primary production, it moves into a secondary pro-
duction phase with water being injected to re-pressurise the formation.
New injection wells are drilled or converted from producing wells,
and the injected fluid sweeps oil to the remaining producing wells.
Secondary production could yield up to an equal or greater amount
of oil from primary production. But this has the potential to ultimately
leave 50-70 percent of the original oil remaining in the reservoir.
A 2009 study by Carnegie Mellon University in Pittsburgh also
concluded Injection of CO2-flood enhanced oil recovery (CO2-EOR),
has been practiced commercially for nearly 40 years in the United
It found as of 2008, there were approximately 100 CO2-EOR
projects operating in the US producing close to 250 000 barrels of
oil per day (BOPD), slightly less than five per cent of total US domestic
oil production. It found that recent assessments of the US pote if
crude oil prices are between US$40 and US$60 per barrel, incremental
production from CO2-EOR could be on the order of tens of billions
of barrels of oil. As a result, billions of metric tons of CO2 will be
consumed and, if derived from anthropogenic sources and properly
managed, could result in permanent sequestration of this CO2 in oil
reservoirs. T&T is one of the highest emitters per capita of CO2 in
the world. ENERGY REPORTER
Companies in wait-and-see
mode for deepwater bid round
Oil production could
double if Govt spends
$1bn on carbon capture
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