Eric Walks the Gas Talk

Energy Minister Eric Williams could have been excused for looking a bit smug when he spoke about the recent natural gas discoveries, in light of questions being raised  about the true state of our reserves. At last week’s Energy Conference hosted by the South Trinidad Chamber of  Industry and Commerce, Williams spoke about bpTT’s Chacala gas find which is estimated to be around two trillion cubic feet of gas (Tcf);  Coconut 1 with a “pre-drill” estimate of close to one Tcf,  and the Manatee 1 which has an initial estimate of 1.5 Tcf. “ What is particularly sweet about each of these discoveries is that they are not from our three Ps - proven, probable and possible but they’re coming out from exploration potential.

So they were not numbers reported prior to this as part of the resource. To those who continue to not think the glass is half-full, the Minister of Energy is an explorationist, “ Williams said. The recent gas discoveries no doubt also boosted government’s confidence as it contemplates construction of a fifth and sixth LNG trains in 2008 and 2010  with new players at the helm: EOG Resources, BHP Billiton and Venezuela’s PDVSA, all to boost and faciliate the down-stream industries which would require vast amounts of gas.

The country’s proven reserves are now 18.81 trillion cubic feet; the  probable of 5.89 trillion cubic feet and the possible of 8.63 trillion cubic feet for a 3P picture of 33.33 trillion cubic feet. Chairman and Chief Executive Officer of BP Trinidad and Tobago (bpTT)  Robert Riley noting the “phenomenal growth” in its gas business, said bpTT is now the third largest business unit in the BP Group worldwide. “Our company now accounts for 10 per cent of our Group’s upstream production.  By 2010, we will be the Group’s largest single business unit, on a production basis, if one excludes Russia, “ he said at the energy conference. The company’s petroleum production in Trinidad and Tobago today, in barrels of oil equivalent terms, is at its highest level ever in the history of its operations. It is currently producing an average of 405 thousand barrels of oil equivalent (boe) daily.

In 2005, bpTT plans to invest some US$600 million in Trinidad, out of which half will be spent on exploration and development wells. “We propose drilling a total of 12 wells at an overall cost of US$280 million. Two of these will be exploratory  the Coconut, and the second prospect,  Deep Ibis, and will be spud in the fourth  quarter. The other ten wells are primarily gas production wells and include sidetracks and re-completions, Riley said. bpTT also plans to continue evaluating the “yet to find” potential of the Columbus basin off  the eastern coast in 2005, focusing on deeper plays. bpTT’s aim in developmental drilling activity is to have full-year production average of 416,000 barrels of oil equivalent. Riley also said the company is about halfway through a planned period of growth designed to make bpTT a 600 mboe/d business by the year 2008. “Our plan is for continued growth at a rate of approximately 12 per cent per annum through to 2008,” he added.

bpTT holds exploration and production licenses for 904 acres off the east coast of Trinidad and produces oil and gas from fields in this acreage with 17 production platforms and one offshore processing facility. British Gas Trinidad and Tobago  (BGTT) is aiming to increase its energy production from 700 mmscf/d gross to 900 mmscf/day gross by the end of the year. Derek Hudson, BGTT’s Chief of Staff said the production targets for 2005 are “ the most aggressive to date.” “BG has over US$600 million in ongoing project commitments with US$250 million in investment planned for 2005 alone,” Hudson said adding that between seven to nine drilling wells are planned for the year of which four are exploratory wells. Describing Trinidad and Tobago as one of the countries contributing to BG’s global operations, Hudson said in less than 10 years, the TT unit had grown from 74 mmscf/d to 700 mmscf/d.

Referring to  Manatee 1, the gas find in a Trinidad offshore area but which straddles the Venezuelan border, Hudson said evaluation was still taking place to determine the size of the discovery. ChevronTexaco operates Manatee 1 but  in partnership with BG Group, each holds a 50 percent in it. Drilled in 91 meters of water, the well is ChevronTexaco’s first operated well in Trinidad and Tobago waters and lies on trend to the northwest of the company’s Loran Field discoveries in Venezuela. Energy Minister Williams said the discovery on the Loran Field on the  Venezuelan side of the border could be as large as 4.5 tcf Trinidad and Tobago and Venezuela signed a Memorandum of Understanding in August 2003, with the aim combining the two countries’ gas reserves in the Deltana region, located off the Paria Peninsula.

Negotiations are focused on two overlapping blocks: bpTT’s Kapok, in Trinidad territorial waters; and Block 1, in Venezuela’s Plataforma Deltana. The significance of the Manatee 1/Loran discoveries to the current negotiations between Trinidad and Tobago and Venezuela was not lost on Ali Moshiri, president of ChevronTexaco Latin America Upstream.  “With our geologic model confirmed by the successful drilling of the Manatee 1 well, we are now positioned in both Trinidad and Tobago as well as Venezuela to take the Manatee and   Loran cross-border resource to the next evaluation phase. This well should also greatly assist the two energy ministries as both countries continue pursuing unitization,” he said.