Oil giant ExxonMobil Corp. has given up on its remote deepwater acreage far off Trinidad's East Coast but will remain in the country in an alternate role.
The world's second largest oil company withdrew from exploration commitments after drilling four dry holes at a cost of $241 million.
ExxonMobil's commitment included the drilling of three exploratory wells on Block 25(b) and four on Block 26, 50-90 miles east of Galeota Point.
Its last two wells, Callicore-1, drilled to a TD of 11,518 ft in 3,716 ft of water on 25(b) and Heliconius-1 drilled to 11,945 ft in 4,428 ft of water on Block 26 targeting Pleistocene and Pliocene sands, were dry holes.
They were drilled back to back in March-April 2002 and followed the failure of Adelpha-1 and Dynamine-1 wells on the same blocks.
Because of the results and the company's continued failure to discover oil in commercial quantities in Trinidad, it reportedly decided to give up the blocks and pull out of the country.
Shift in focus
However, following negotiations with the Trinidad and Tobago government it appears that the energy giant is now willing to stay.
It has successfully negotiated with the government to forego payment of $47.2 million in penalties which ExxonMobil would have had to meet for its failure to complete its 7-well drilling program.
In return the company has agreed to invest $25 million in a joint geotechnical study with Trinidad's state Petrotrin and engage in a 3-year exploration program with Petrotrin's Trinmar Business Unit in the potentially oil rich Soldado area in the Gulf of Paria off southwestern Trinidad.
Included in the plan would be a study to develop lead and prospect inventory including direct hydrocarbon indicator analysis, seismic acquisition, and post-drilling analyses.
ExxonMobil proposed to reprocess a 3D seismic survey acquired in 1992 by applying state of the art methodologies and algorithms in consultation with Petrotrin.
The oil giant has also given an undertaking to acquire, process, and interpret new 3D seismic in Trinmar's North Marine Area and drill 3 to 5 exploratory wells including one deep test well.
In return ExxonMobil would have the option to participate in the development of any discoveries made by the exploratory wells.
Government process
The Caribbean Island's Energy Minister, Eric Williams said: "Trinmar has the greatest potential for increased production in the state sector, and we see this as an opportunity to maximize this potential while keeping one of the world's largest oil companies here."
The Trinmar Business unit produces 36,000 b/d, and experts have agreed that with investment in infrastructure and additional drilling it could easily exceed 70,000 b/d.
The decision by the Patrick Manning administration to allow ExxonMobil to avoid paying the penalties in return for its investment in the Petrotrin project caused significant uproar in Trinidad with allegations that the government was setting a bad precedent.
Technocrats in the country's Ministry of Energy had advised against the move, suggesting that ExxonMobil should be required to pay and that the $47.2 million be given to Petrotrin to make its own investments.
But the Prime Minister overruled this, arguing that the technocrats were not looking at the long term development of Trinidad's oil industry and that he had to take a more panoramic view.
However the country's opposition accused Manning of creating confusion in the energy industry saying: "The Prime Minister's decision to unilaterally vary the terms against the advice of experienced senior technical advisers in the Ministry of Energy would lead to uncertainty, inconsistency, and ultimately chaos in the hydrocarbon industry."
Longer term view
Manning however countered by arguing: "The country (Trinidad and Tobago) could not pass up the opportunity to collaborate with a company such as ExxonMobil, which believes strongly in research and development and one which could deepen this country's processes with respect to the conduct of its petroleum affairs."
Williams supported Manning's view. "ExxonMobil will form an integrated project team with Petrotrin personnel to expose them to the multinational experts, technologies, and practices. Throughout all phases of the project, ExxonMobil will make opportunities available for the training and monitoring of Petrotrin personnel assigned to the project."
He added that 10 geoscientists and petroleum engineers from Petrotrin will benefit from a "2 month school" in which they would learn from the expertise of ExxonMobil personnel in areas as reservoir management technology.
The training will take place in Point Fortin, Trinidad, and Houston.
Meanwhile the consortiums of Shell-Agip-Petrotrin and BPTT-Petrobras-Norsk Hydro-Petrotrin, which also have blocks in Trinidad's deep water, have so far failed to find any oil there but have not yet given up (see map, OGJ, Mar. 25, 2002, p. 26). Shell at present is drilling another exploratory well.