Curtis Williams
OGJ Correspondent
PORT OF SPAIN, Oct. 12 -- The Trinidad and Tobago government identified at least 4 tcf of stranded gas that it intends to unlock by offering sub-licenses to companies in blocks operated by large multinational oil and gas companies.
The country’s new Minister of Energy Carolyn Seepresad-Bachan told the Trinidad and Tobago Parliament the move is to allow the government to engage smaller companies to develop smaller deposits of oil and gas in areas operated by larger multinationals.
She said, “We have also taken a decision to amend the Petroleum Act, section 24A, to allow for what we call issuing of sub-license, which was only on land before. We are now extending it to marine operations to encourage investment opportunities.”
By doing so, she said, “It is estimated that we will be able to unlock small deposits of oil and natural gas that will be considered uneconomic to the larger operators. For example, it is estimated that in the case of just one operator, there is 4 tcf of natural gas in small deposits that can be developed.”
The law will take effect Jan. 1, 2011.
While the Minister did not name the operator, it is well known the Trinidad and Tobago government is concerned BP Trinidad & Tobago (BPTT) has been sitting on several trillion cubic feet of gas that is not economical to develop.
But Robert Riley, the company’s chairman and chief executive, said BPTT is unwilling to give up part of its acreage for smaller producers to go after gas it knows is there but finds too small to produce economically.
Riley told OGJ simply bringing in a smaller company to produce smaller fields will not work and added that he does not expect government to force his company to give up any of its acreage.
“I don’t think I have anything to fear in Trinidad because no government has come in and forced us to get off acreage that we are interested in,” Riley said.
Riley acknowledged sub-licensing could lead to more activity in the upstream sector in Trinidad and Tobago but said his company was sufficiently active.
He said, “I am interested in finding if there is any more out there and going after it. And I don’t think the problem we have in accessing some of those pools is a problem that will be solved by just putting small players on it.”
Riley said, “I believe that we are husbanding our acreage adequately, and we are continuing to invest in husbanding that acreage adequately.” Smaller producers “would have the same problems that we would encounter and probably less knowledge and capability,” he said.
Riley said while his company has not drilled a wildcat well this year, he expects it will be able to replace more than 85% of the gas it used in 2010 as it did in 2009.
Seepersad-Bachan also announced several other fiscal measures aimed at encouraging production from mature oil fields.
She said the government would give a 20% investment tax credit to qualifying capital expenditure, which will be offered for mature fields over 25 years old.
In addition, a 20% tax credit on qualifying capital expenditure would be granted to companies involved in enhanced recovery projects utilizing steam, carbon dioxide, or water flood injection.
She said the moves were geared towards improving the country’s investment climate and creating opportunities for enhanced activities in the sector by arresting the natural decline in oil production, stimulate activities in mature fields, prolong the life of marginal fields, and revive the local energy service sector.
File photo from PDVSA..
Photo from Odfjell Drilling.
