BHP Billiton making pitch for local content

For BHP Billiton and its partners, the Angostura field off Trinidad’s northeast coast represents a US$6 billion investment.

For Josianne Poujade and other local engineers it means getting the chance to work for an international company, designing one of the wellhead protector platforms, one of four that will be placed in the Angostura field. Poujade is in her first job out of university, working for Worley Trinidad Ltd, an Australia-based design firm which has worked on a variety of projects around the world. Worley won the contract to build the Aripo wellhead protector platform. While it is an international company, about half of its staff in Trinidad is local.

“They’re giving me what no other company could offer; a chance to work in design engineering. It will also give me experience with process engineering as well,” Poujade said. That’s critical to BHP Billiton which has made local content one of its measures of success in the Angostura development. It would be better for a fully local company to do the work but, even as the Angostura project is getting off the ground Trinidad and Tobago is still grappling with getting a bigger stake of the services industry. It hasn’t been easy. It’s possible that none of Angostura’s wellhead protector platforms will be built in Trinidad. While plans are on the cards for a fabrication yard, it will not be ready in time. Even if it were, there are other issues.

The production sharing contract which governs the block does not give figures for how much local content should be used. What it says is that local firms should be used where competitive and along industry standards. Country manager Nick De Verteuil said definite figures would be dangerous. “If you establish quotas here in Trinidad and Tobago and the Government dictates that local industry has to do a certain minimum percentage...I just want everyone to think back to the negative list,” he said, adding that the negative list led to local firms not being competitive.

Unfortunately, when BHP Billiton did offer a contract to build one of the platforms, local firms were not competitive. Many passed on the opportunity and the one that tendered came in 25 percent higher than the foreign bids. “We are trying very, very hard,” he said. “Let’s be realistic about this. We enter into a project like this in Trinidad it has to be a concern. If this country is trying to make its mark with respect to fabrication and so on you don’t want failure initially because the word is going to go out into the international community that, ‘Hey they tried to do this in Trinidad and they stumbled’,” he said.

While the Angostura project is going ahead there will probably be other opportunities. Just next door to 2(c) is 3(a) which also looks promising, while companies are also starting to look at what is called the ultra deep blocks further east. “It makes sense for us, the industry to build local capability because it is my hope that in that very expensive block 3(a) we will find additional hydrocarbons and need to put in additional platforms out there,” De Verteuil said. “If we can get it done here in Trinidad at a cost competitive with or less than the international marketplace we’re ahead of the game.” For De Verteuil and BHP Billiton, the real opportunity lies in design, not fabrication.

Design and engineering in the Angostura project is going to account for nine percent of the capital expenditure and about 180,000 man hours. Fabrication will account for 11 percent and 140,000 man hours. Darryl Rattai, director at Worley Trinidad said the firm will be looking to bid on design projects in other sectors. That, he said, would give local engineers like Poujade more opportunities.