Robert B. Riley, executive chairman and CEO of BP Trinidad & Tobago LLC (BPTT) is the first native Trinidadian to head a multinational oil company unit operating in the twin-island Caribbean nation since the parent company began operations there nearly 40 years ago.
Riley said that since he assumed office, BPTT's management also has undergone a significant transition. "We have changed the face of the management structure of this organization, and there are now more nationals with major portfolios of responsibility for growing our business in Trinidad and Tobago. This is a promise we made when I assumed office, and I can safely say we have delivered."
Of the 17 members of BPTT's leadership team, 10 are Trinidad and Tobago nationals with a "strong lineup of nationals in upper and middle management and a large number of nationals who are abroad training for senior responsibility in the organization," he said.
Since Riley became BPTT's executive chairman, he also has set up a sustainable development unit within his organization that is working with local stakeholders to see how BPTT could increase local participation in its operations.
This already has led to moves by government and private enterprise to start a platform fabrication business to meet BP's projected demand over the next 5-10 years and BHP Petroleum Pty. Ltd.'s expected need for platforms as it moves to develop its billion-barrel (OOIP) field just north of BP's Trinidad operations.
Riley said the inclusion of more local business in its operations also would lead to savings for his company.
"There is no need to ship a platform from Louisiana, when that very platform could be built right here in Trinidad and Tobago," he contends.
BPTT's projected growth
BP's Trinidad and Tobago operations currently produce 280,000 boe/d, and production on the Carib- bean island is expected to increase to 350,000 boe/d by yearend.
"Within the BP (PLC) group globally, Trini- dad and Tobago has overtaken Alaska to become the group's third-largest producing business on the basis of barrels of oil equivalent," Riley said. "Consider this in the context that BP is the world's fifth largest energy business, and you would understand more clearly that we are in fact operating a world-scale business in Trinidad and Tobago."
BP's operations in Trinidad and Tobago are surpassed only by its North America and North Sea holdings, Riley said, noting that natural gas production forms 80% of his company's total production, with only 20% coming from oil.
Nevertheless, Riley said that last year the company increased crude production in its mature fields by 35,700 b/d to 84,900 b/d. He credits the application of new technology and hard work for the increase in crude production.
"Our crude production has been declining continuously for several years because we have been producing from mature fields. Yet we were able to raise our production average of 49,200 b/d (in 2001) to close to double that figure (by late 2002). Crude production, not condensate, has been on the rise in all our producing fields. And it does not stop there; we expect production to continue rising (this year)," Riley said.
Riley said that BPTT will continue to search for new oil, but it also intends to keep expanding its Trinidad business through increased gas production. He identified continued LNG expansion as one means of increasing gas usage.
He noted that a recent survey by Houston engineering consultants Ryder Scott Co. had placed Trinidad and Tobago's proven gas reserves at 21 tcf, with an additional 30.7 tcf of "identified exploratory resources" and 28 tcf of "unidentified exploratory resources."
"The country's geoscientists are of the general view that our hydrocarbon basins hold a potential in excess of 90 tcf. Some are even more generous with their estimates," Riley said.
LNG expansion
He contends that further LNG expansion would lead to significant increases in gas use, with 818 MMcfd of gas being required for the proposed fourth train at the Atlantic LNG Ltd. LNG plant at Port Fortin.
BPTT and BG Group PLC supply 1.075 bcfd of gas to Trains 1 and 2 and will increase gas volumes to 1.65 bcfd with the completion of Train 3, eventually surpassing 2.25 bcfd if Train 4 comes to fruition (OGJ Online, Nov. 4, 2002).
Riley said that further LNG expansion is not only good business for BPTT but also for the Trinidad and Tobago government.
"Train 4 will demonstrate the continued ability to extend the competitive Trinidad LNG model. We propose to utilize familiar technology, and the plant is nearly 60% larger. Its costs meet our expectations for delivery of scale against benchmarks that could deliver a return to the government that is better than any of the previous trains. This is so because of the greater efficiency feeding more gas to product with lower CO2 emissions."
He added that BPTT had secured lucrative markets in the US that would lead to higher returns for both the company and its host country.
Riley said Trinidad and Tobago should not risk losing its LNG advantage, because it is best positioned to take advantage of the two most lucrative markets: the US and Europe.
"Trinidad and Tobago could increase its competitive advantage by developing or retaining a leadership position in the markets served by gas-based products," Riley said. "A strengthened position in mature, yet high-return products like LNG, methanol, and ammonia would ultimately facilitate the development of new product areas and markets as emerging technologies mature, thus ensuring long-term growth and security."
Riley said BPTT believes LNG offers the best opportunity to generate significant short-term value creation, because there is significant projected future demand.
He also urges his country to encourage further ammonia and methanol expansion as well as investment in an aluminum smelter.
"An (aluminum) smelter offers an attractive revenue diversification option in the short-to-medium term and offers large job-creation potential." Riley said.
Riley contends that, in the medium-to-long term, however, new technologies such as methanol-to-olefins and methanol-to-propylene would offer the potential to create longer value chains in Trinidad and Tobago. He also argues that efforts should be made to increase the potential ethane feedstock to improve the chances of attracting a world-scale ethylene complex to that country.
