Trinidad and Tobago eyes gas cartel; plans license bids

Dec. 12, 2008
Trinidad and Tobago, eyeing the possibility of joining an emerging international gas cartel, plans to open bidding in 2009 for offshore natural gas acreage.

Eric Watkins
Oil Diplomacy Editor

LOS ANGELES, Dec. 12 -- Trinidad and Tobago, eyeing the possibility of joining an emerging international gas cartel, plans to open bidding in 2009 for offshore natural gas acreage.

Energy Minister Conrad Enill said five shallow marine blocks that will be part of the bidding process are on the eastern and northern coasts of the twin-island Caribbean nation.

"Our evaluation indicates that the blocks are likely to be gas-prone and [will] offer great potential for enhancing our gas reserves," Enill said at an IBC Energy Caribbean conference.

Separate deep Atlantic blocks, also due to be offered for exploration bids next year, lie to the north, he said, adding that past exploration activities are believed to have covered only about one third of the country's potential hydrocarbon resources.

"Our new initiatives will target resources that are located primarily in the deep Atlantic, our new frontier," Enill said.

Talks with Russia, Iran
The announcement coincided with an interview Enill gave over local television that Trinidad and Tobago is ready to hold talks with Iran and Russia in order to maximize financial returns from the sale of its gas on the international market.

"The reality is that we find ourselves in a situation where, because we are a gas producer, and these are gas-producing countries, we are now associated with that group of countries," said Enill.

"If you are looking at gas security and supply-and-demand issues you need to sit down and talk with them," Enill said.

"If you take three of them—I think Russia, Iran, and Qatar—you really have them controlling 59-60% of global gas production, and therefore there are issues…of what they can, in fact, do to prices," Enill said.

Understanding dynamics
"What we are seeking to do is to make sure we understand those dynamics because they can fundamentally determine at what price the product is going to be sold," he said.

Enill said that in the current circumstances, with oil prices being sold "below $40/bbl" on the world market, the move by the gas producers to determine prices "is good for Trinidad and Tobago because we are going to benefit from that."

"The other thing we are aware of," he said, "is that these countries now want to have a bigger say in the [geopolitical] economic situation, and therefore they are moving strategically to ensure that they can have a better command. And I think that is going to impact us positively."

Contact Eric Watkins at [email protected].