Deeper is sweeter

Robert Riley, chairman and CEO, bpTT, thinks if the Ibis Deep well delivers as it should, then Trinidad and Tobago would solidify its position as a global gas player.

“It would mean new prospectivity in the Basin and increases in the total Basin resource. Other operators will then follow suit and it would be a great situation for Trinidad and Tobago to be in,” he said.

He was speaking on the topic, “Operating A Successful Gas Business and Projections for the

“Future — the bpTT Experience” at the monthly meeting of the American Chamber of Commerce of Trinidad and Tobago at Movie Towne last week.

On Ibis Deep well, which is currently being drilled in the South-East Coast Consortium block in the Columbus Basin, Rily said if successful, “it will open up a brand new source of hydrocarbons for Trinidad and Tobago — most likely gas - that could radically alter the existing

reserves picture.” Ibis, a consortium of companies — EOG Resources, Petrotrin and NGC (National Gas Company) is looking at a target depth of about 20, 000 ft.

He said while their operations may be entering the Creaming Curve, a new phrase characterised by drilling more modest prospects “but with a high degree of confidence because of our knowledge of the Basin.”

The Creaming Curve could be delayed though - but only if Ibis lives up to expectations.

The company, he said, now produces about 700 million cubic feet of gas a day for local demand and which is then sold to NGC. About 1.6 billion cubic feet is exported as liquefied natural gas ( LNG). Together, this is about 2.3 billion cubic feet a day.

The gas comes from seven fields, the largest individual producer being Cannonball field, whose three wells are delivering 740 million cubic feet of gas a day. “This kind of rate is unheard of in any other part of the BP Group,” he noted.

He said the company’s record of finding gas has been phenomenal: a 70% success rate, which he said, is double the international benchmark. “Our leading position in data assembly and interpretation gives us a big advantage in how we approach our work in the Trinidad offshore,” he noted.

He then tackled the thorny issue of gas reserves. “What we were able to offer the market was certainly around the availability of proven gas reserves. This was a unique situation in many ways and paid off handsomely in that bpTT was the only company in a position to pledge proven reserves to Atlantic LNG’s train one, which commenced production in 1999.”

“A 20-year gas contract, which is how the LNG business normally works, is a very long period of time, so both we and our customers had to be very certain that we could cover it.”

He said the Ibis Deep is the latest attempt to live up to the reputation of being able to deliver and the ability to be able to find gas, almost on demand.

He said the company expects to develop four new fields over the next five years. “This will help to recover the maximum amount of proven reserves and to recover some of the probable

reserves thereby maintaining our high rates of gas production to the domestic and LNG markets,” he said.

On reserves, he said bpTT’s case already have over 13 trillion cubic feet of proven reserves which is approximately two-thirds of the total resource base. Even without Ibis, he said bpTT is expected to produce of 500,000 barrels a day equivalent or three billion cubic feet a day of gas, for the next 20-25 years.

Exploration and the development of fields is also done in the most cost-effective way possible, he said business executives..

Their finding costs have been low in international terms, under US$1 per barrel of oil equivalent as opposed to US$2 a barrel. The development of those reserves is around US$1 per barrel while finding and development costs of US$2, which he said, was much better than the world average. Cannonball was as low as US$1.60, which was extremely good, he stressed.

Amcham president Raymond Gatcliffe said the health of the TT economy in the next 20 –30 years will largely depend on the success of the upstream companies and government working in close cooperation to discover and develop significant reserves.

“The issue of natural gas reserves is second to none,” he said, noting it was significant how those reserves are used, and how the proceeds of those government revenues are invested and spent.

On local content, Rily said it is bpTT’s emergence as a gas company that has provided the impetus for the design engineering and fabrication of offshore platforms in TT.

Cannonball, a pioneering effort, paved the way for Mango and Cashima, now under construction at the La Brea fabrication yard in south Trinidad. Also, the just-completed Oilbird platform for EOG Resources.

“Our thinking is that if we are always dependent on the outside world for essential assets such as platforms, then the outside world is going to influence the pace at which we develop and, indeed, the pace at which we can exploit our reserves.”

“If we can do it ourselves, then we will be able to produce reserves faster.”

He noted that while Cannonball and its successor platforms now being put together as “cookie cutter” design, he wants to expand local content and scale in design engineering and fabrication scale.

“We believe design engineering and fabrication can both be increased in size,” he said and talked about getting into into the more petro-technical type services for the industry and taking local content to a newer level.