Soca warriors, Oil and Gas

“Just as it was with the Soca Warriors”, Government is cautiously optimistic that the Ibis Deep, the deepest well in Trinidad and Tobago would strike the oil and gas target, Prime Minister Patrick Manning said yesterday.

Manning was touring bpTT’s Constellation 1- Ibis Deep Well yesterday. The PM, a trained geologist, said it was the first time in 20 years that he had been on a rig. Leading Manning and Energy Minister Dr Lenny Saith on the conducted tour of the facilities was bpTT’s Chairman Robert Riley.

“We are very confident...We anticipate that because of the size of the structure, if the well is successful, the reserves would be significant. The estimate in terms of gas is between 2 1/2 and six trillion cubic feet. “ he said. The likelihood of success is 35 per cent. But Manning stressed that because of the expertise bpTT had developed over the years, the company’s success ratio was much higher than would normally be the case “and therefore we are very optimistic about the success of this well even though we know there are risks”.

But the Prime Minister dismissed any notion that as Minister of Finance he was planning his next budget on the basis of any possible revenue increase derived from this project. “I (The Government) am not living hand to mouth,” he said, turning for support to Riley who pointed out that the gestation period between discovery and production would be three to five years. The well is operated by bpTT which is investing US $70 million in it and which would have a 36 per cent stake in any reserves discovered there. Other stakeholders are EOG Resources to which the acreage is licensed and Petrotrin and National Gas, two state companies.

He said there were three such prospects. Two creteous wells, held by Exxon, would be drilled not too long from now.

Manning said Trinidad and Tobago was now completing the base of an industrialised state. He said by 2010-11 the edifice for a modern industrialised Trinidad and Tobago would be in place. He said it would be the culmination of the plan designed by founding father Eric Williams when he turned the sod for ISCOTT in 1976. “It is a vision, the realisation of which we are now beginning to see,” he said.

Pointing to the potential revenues to be derived from the “exciting phase in the oil and gas sector”, Manning said: “When the Government embarks on expenditure, it is not being wild. It is incurring expenditure on the basis of our understanding of the productive capacity of the country and on the basis of the revenues, current and potential.” He said there was a “proper balance” between revenue and expenditure. Manning added that Trinidad and Tobago spent a lot of time formulating its oil and gas tax regime and utilised the best expertise in the world because it recognised that a judicious balance had to be struck between incentives (to oil and gas companies to explore and produce) and the revenues the country gains from the exploration of its oil and gas reserves. “We haven’t done too badly thus far,” he said. He said a Ministry of Finance team had just returned from consulting a world known expert, Professor Vandez, on taxation.

On the Ibis Well, Riley said the company should know by the end of the year whether it (the well) is a success or not. He said the well was one of “three to six prospects that we have lined up.”

“Our programme of exploration intends to do one like this per year certainly for the next three years and maybe beyond,” he said.

“I believe we would be successful. We’ll take off where the Soca Warriors left off,” he said.