Trinidad and Tobago to initiate new fiscal regime
Trinidad and Tobago has announced that before the next offering of exploration blocks, it will have in place a new fiscal regime that will make the country more competitive.
PORT OF SPAIN, Sept. 14 -- Trinidad and Tobago has announced that before the next offering of exploration blocks, it will have in place a new fiscal regime that will make the country more competitive.
Helena Inniss-King, the twin-island nation’s director of resource management, told a news conference in Port of Spain recently that measures will take effect before the end of first-quarter 2010, when exploration blocks will next be offered.
Inniss-King said Trinidad and Tobago’s government was in discussions with the multinational companies involved in the country’s energy business and wanted to ensure that everyone was on board before they took legislation to the Parliament to change the fiscal terms.
She said this was in an effort to ensure that the next bid round was successful and to encourage exploration for gas.
Recently Houston-based consultants Ryder Scott revealed the results of the annual gas audit that showed that Trinidad and Tobago had used 1.5 tcf of its proved reserves in 2008 and had not replaced it, although it increased its probable and possible reserves (OGJ Online, Sept. 3, 2009).
The consultants also advised that Trinidad and Tobago increase its exploration so that it could have a record of 100% replacement of proved reserves.
Inniss-King said the new terms were designed to make it more attractive for companies to explore smaller fields.
“When we look at what remains in the shallow water, we find that most of the big accumulations have already been explored or discovered,” Inniss-King said. “Some of them are being produced right now. So what we see is that there are still lots of small fields remaining in the shallow acreage and what we have done with respect to the fiscal is design a regime which will encourage exploration and development of small fields,” she said.
The country’s energy Minister Conrad Enill said the government accepted that the current fiscal regime had removed Trinidad and Tobago’s competitive advantage and was now moving to correct this.
Enill said, “The main objective of the fiscal review is to provide an enabling environment to encourage and promote exploration and development activities, create a more competitive environment, while offering a more equitable sharing of the economic rent. In this regard the terms and conditions of the production-sharing contract and the fiscal system have been revised.”
Enill also pointed out that the competitive bidding process was being rationalized “to provide for clarity in the assessment of bids and a speedier decision making process.”
Blocks for bid
Innis-King also announced that in first-quarter 2010 the Trinidad and Tobago government will offer six blocks for bid.
She said the blocks are all in the shallow water and are all gas-prone and highly prospective, including NCMA 2, which was offered in the last bid round to a bidder that eventually pulled out due to the global financial crisis.
Innis-King said of the other blocks: “We also have NCM (4). In there we have two gas accumulations at this point in time. We have looked at 4(b) and we are seeing lots of gas in it. With respect to 5(d) we expect some gas with some liquids. All in all the six blocks are quite prospective.”