Govt announces new round of competitive bidding for oil and gas

Government yesterday announced the start of a new competitive bid round for oil and gas exploration.

The announcement came from Energy Minister Eric Williams in a statement in the House of Representatives. And companies interested in bidding would have to pay a pre-bid application fee of US $60,000. Williams, in response to a question, also disclosed that the Exxon/Mobil issue which came out as a result of the last bid round, was still to come to Cabinet for a final determination. The Government, amid some controversy, had decided to exempt Exxon from paying a US $45 million penalty for failing to complete its contract drilling off Trinidad East Coast.

The new competitive bid round will be opened on Friday May 23rd with the publishing of the Competitive Bidding Order. The deadline for submission of bids will be Tuesday September 30. Williams said this bid round, was designed to continue the developmental thrust in the energy sector through the continuous exploration of hydrocarbon re-sources. It would also serve to ensure that our rapidly expanding and developing downstream gas industry is efficently serviced with a primary energy supply, he added. Williams said in his bid round nine blocks consisting of a mixture of shallow water shelf blocks and deep-water blocks, located on the west, east and north coasts of Trinidad and Tobago were being offered for bidding in the Competitive Bid Round 2003.

Williams said Cabinet agreed that companies should pay a pre-bid application fee as a prerequisite for bidding. This fee entitles the interested company to a data package on the relevant block. Fees for most of the blocks are set at US $60,000 with fees with two blocks set at US $40,000. Competitive bidding is an open tendering process by which acreage with hydrocarbon bearing potential is offered to petroleum companies to explore for oil and gas. In Trinidad and Tobago competitive bid rounds were previously held in 1995, 1997, 1999 and 2001. Williams said that as a result of these bid rounds, Government signed a total of 17 Production Sharing Contracts with the contracting companies to engage in exploration activities on these blocks, thereby generating more than TT $1 billion in direct revenue to the Treasury within the last seven years.