BP Trinidad & Tobago (BPTT) said it will not give up any of its acreage in Trinidad and Tobago because it has a long-term development plan “including the development of smaller pools” of natural gas.
BPTT’s response was to an announcement by Trinidad and Tobago Energy Minister Nicole Olliviere stating that operators will have to fully exploit their blocks or relinquish idle acreage.
In an e-mail response the company said, “Our philosophy is to leave no molecule behind and therefore we continue to look for opportunities to make some of the more economically challenged smaller pools more feasible to produce. This includes the use of technology, maximizing the use of existing infrastructure, and also looking for opportunities to partner with other operators.”
BPTT pointed to the 2011 example in which it partnered with EOG Resources Inc. on the Sercan development and said it was “again partnering with EOG on a new development called EMZ.”
BPTT said, “Both of these developments are well under 1 tcf of [gas] reserves. BPTT continues to develop smaller pools in our existing acreage and tying these into our existing infrastructure. Many of our development wells are less than 100 bcf of reserves and we are going after the wide spectrum of reserves between 10 bcf and 100 bcf. Smaller pools of resources are therefore fundamental to our current and future plans.”
Olliviere told members of the Energy Chamber of Trinidad and Tobago that Ryder Scott had identified 127 prospects within the acreage currently operated by upstream operators under production sharing contracts and exploration and production licenses. These prospects represent an unrisked resource estimated at 31.9 tcf and a risked resource estimated at 7.2 tcf. With unrisked field sizes ranging from as low as 100 bcf to 1 tcf.
Olliviere said the new government would be prepared to provide incentives where required but in an attempt to increase natural gas production it wanted to ensure that the acreages were being fully explored.
She said, “Upstream Operators shall be expected to develop a program of activity which exploits fully the acreage they currently hold. If the requisite programs are not developed, the upstream operators will be required to relinquish acreage that remains idle.”
This does not include any relinquishment that operators are contractually obliged to undertake.
Asked if fiscal incentives would assist the energy giant in producing smaller fields, BPTT argued that while it would play a role the issue of gas pricing had to be addressed.
“For smaller pools to be produced economically we focus on many factors including costs, development concepts, new technology, etc. Fiscal incentives will always help as will improvements in the price that upstream operators fetch for gas. BPTT fully supports the introduction of an energy policy to holistically address commercial and structural issues related to field development. Fiscal incentives and more market driven pricing attained through contract renewal should form part of such a policy,” the company said.
In her speech, the minister also acknowledged that Trinidad and Tobago had a gas shortage and said the situation was being made worse by a number of gas negotiations that are to be resolved among National Gas Co. of Trinidad & Tobago, BPTT, BG Group, Atlantic LNG, and a number of methanol and ammonia plants.
BPTT was asked if it was confident it could put more gas behind pipe if it had contracts to do so and while it did not give a straight answer it seemed to hint this may be possible if the price is right.
BPTT said, “BPTT is confident that there are still significant resources to be found and developed in the Columbus basin. However investment decisions on future exploration and development activity will be guided by current and future contractual arrangements and the country’s longer term energy policy.”
It added that the Ocean Bottom Cable Seismic Data has boosted its confidence in the Columbus basin and this data is continuously being used to de-risk future opportunities of various sizes.
