Basic instinct

On the issue of finding more gas, BP CEO and chairman, Trinidad and Tobago, Robert Riley said a lot is still out there to be discovered. "We are very challenged by that, as usual. It’s a lot out there to be found and produced and we are going to go at this as fast as we can and as safely as we can and we’re looking to see discoveries every year going forward. We’re very optimistic, the future is very bright, it’s very exciting and we hope to continue being a big part of that future," Riley told BusinessDay.

Over the next five years, BpTT, increasingly important to the global company’s gas production assets, plans to spend US$1.2 billion in their exploration programme in Trinidad.

"Next year, we are going to return to one of the very deep wells, the Ibis well that we are doing with EOG, and we have an established drilling programme of one major big deep well once a year for the next five years, so we’re going after something like 8 tcf (trillion cubic feet) of gas over the next five years and we’re looking forward to the continuing expansion and optimisation of the Altantic, strengthening of our base," Riley added.

BpTT last week sold off three mature oil fields, Teak, Samaan and Poui (TSP) to Spanish company Repsol YPF and to the government through state-owned Natio-nal Gas Company and Petrotrin, to concentrate on growing its natural gas business.

The fields, located off the south east coast, discovered between 1968 and 1972 are not featured as part of BP’s world wide energy portfolio. "It’s not as attractive as our gas assets. There comes a point when an asset ages, requires more and more attention and we were finding that we couldn’t give it the attention it deserves as well as bring certain mature field activities to it," Riley said.

Repsol YPF spent US$229 million for a 70 percent equity stake in the fields while government forked out US$74 million for its 30 percent share. Productions from the fields peaked at 145,000 barrels of oil per day in 1978 and to date the fields have cumulated a production of over 833 million barrels of oil. The three fields currently produce some 20,500 barrels of oil equivalent per day with risk reserves estimated around 174 million barrels of oil equivalent.

Under the agreement, assets purchased include the three oil fields, one gas field called Onyx and four production and ten drilling platforms. Repsol plans to conduct deep engineering study on the oil and gas fields, introduce new technology and then try to optimise the value of the assets.

"We plan to increase the production and for the future, it will be part of our production. We are working on it, we’re creating a joint team with our partners and we expect in three to four years, that the Onyx gas will be on stream as well. So it’s not a matter of increasing the present production but also to bring on stream new gas fields," Valentin Cortina, Director of Repsol’s Caribbean Business Unit said in an interview with BusinessDay.

Over the next five years, Repsol plans to invest US$500 million into the oil and gas fields. It is part of a US$1.2 million that the Spanish company has committed for investments in Trinidad and Tobago between 2005-2009.

"We want to more and more to become involved in Trinidad," said Cortina adding that the company will formally open its Port-of-Spain office next week. "We’re a long-term investor so this is the first step," he said. Repsol YPF, through its 30 percent shareholding in BP Trinidad and Tobago produces 120,000 barrels of oil equivalent per day.

It also has a 22.22 percent stake in three production trains of the Atlantic LNG plant. It also has a 22.22 percent in Train 4 which is expected to begin operations next month.

NGC, which has spent some TT$ 2.4 billion over the past two years in the construction of a 56" cross island pipeline and a 36" offshore pipeline, sees positive prospects in the partnership for the oil and gas fields.

"Opportunities exist for the partners in terms of the Onxy gas field prospect. In addition, there are possibilities of synergies in this high cost operating environment of mature oil fields and gas compression operations through closer cooperation in areas such as logistical support," said President, Frank Look Kin.

Petrotrin is also seeking out opportunities for oil and gas reserves and production growth. Petrotrin is actively engaged in marine operations in gas in the North Coast Marine Acreage; in oil production off Trinidad’s west coast with its Trinmar operations; in forthcoming oil and gas exploration activities in the recently executed Blocks 1(a) and 1(b) in the Gulf of Paria; in oil, gas and condensate production in Trinidad’s East Coast Marine Areas in Galeota and the South East Coast Consortium, as well as in its extensive operations onshore.

"With the Onyx field as an existing gas discovery, opportunities to enhance production from existing operations and the further opportunities for offset oil and gas potential from previously identified exploration prospects, Petrotrin is understandably encouraged by this venture, according to Wayne Bertrand, Petrotrin’s President, Operations.

"As we seek to participate more substantially in the gas value chain, the Onyx gas discovery is seen as key to initial reconnaissance and identification of additional opportunities in this new acreage."

Energy Minister Eric Williams estimates that the country has about 50 years of crude based on current production rates. Proven reserves stand at 621 million barrels of oil, which at production rate equate to just over 11 years. Probable reserves is 404.6 million barrels and risked possible reserves stand at 1.688 billion barrels of oil.

Williams said that over the next year, government will conduct two bid rounds which will result in further exploration activities in the country.

The first bid round will comprise acreage, onshore Trinidad and Tobago as well as offshore and also in shallow and "slightly deeper" waters. The second bid round will target offshore acreage, off the east coast, in an area known as the Trinidad and Tobago Deep Atlantic Area.

Chairman of Atlantic LNG, John Andrews is also very optimistic that more natural gas will be found to fuel the continuing expansion in the energy and petrochemical industries.

"Well, the problem is we never have enough gas, they always (have to) go out and find more gas," Andrews said. " One of the advantages of having additional plants is that people go out and look for gas, knowing that there will be an opportunity to use it. There is more gas to be found and people will go out and look at it," said Andrews.

Describing the energy sector as very buoyant at this time, Andrews, a former finance technocrat sees the government optimising the use of natural gas resources by the expanding sector.

" Therefore it’s creating both the opportunity for the use of it and also creating the opportunity for people to go out there and search for it and that is generating a lot of economic activity in Trinidad and Tobago especially with the high prices that petroleum is fetching in the world today."