Pereira: We are still trying to understand the geology of the hydrocarbon system

Despite the confirmed presence of hydrocarbons in the acreage, BHP Billiton Trinidad and Tobago is still weighing its options on the development of block 3a, which it operates on behalf of itself, Chaoyang, Anadarko, Petrotrin and the National Gas Co. (NGC).

The consortium has held the block, 45 kilometers off the northeast coast of Trinidad, since October 2001 under a production sharing contract (PSC) with the Ministry of Energy and Energy Affairs (MEEA).

It is adjacent to block 2c, which the Anglo-Australian multinational also operates and which has long been productive, averaging 8,352 barrels per day (b/d) of oil and 380 million standard cubic feet per day (mmcfd) of gas, in 2014. NGC and Chaoyang are also partners on this block.

Portions of 3a have already been returned to the MEEA under the provisions of the PSC, but BHP Billiton T&T and associates have retained what is known as a market development area.

Once the market development phase has been reached under a PSC, the operator concerned is obliged to submit a market development plan.

If this is not done, the market development phase can be rolled over at the discretion of the Ministry, but it costs money to do so.

On the face of it, the 614-square-kilometer block should be ripe for development. Seven exploratory wells and two sidetracks were sunk there, and discoveries of both oil and gas were made, in Kingbird/Ruby and Delaware, respectively.

The first two were recently assessed to have close to 135 million barrels of oil resources, with a possible upside of 175 million barrels, and the latter with around 550 billion cubic feet of natural gas.

Such amounts are eminently producible, a welcomed development in light of stagnant crude oil production and the need for more gas to shore up shortfalls from existing production fields.

Analysts say that BHP Billiton T&T is now making much more money from gas production than it is from oil production, given that the National Gas Co. (NGC) asked them to supply much more gas than they are contracted to supply (220 mmcfd).

Its new Angostura gas development is primarily expected to maintain contracted supply, but there will be no lack of demand for additional gas going forward.

Before any development programme in 3a can be activated, however, the operator will probably want to undertake some appraisal drilling.

To do so requires reprocessing of the existing 3-D seismic, which has now been completed, according to BHP Billiton T&T’s President and Country Manager, Vincent Anthony Pereira.

“We have done our assessments of the area and we are now trying to put all that together in a regional context to see what we do next,” he says.

Mr. Pereira concedes that the market development area is a “complex” one, illustrating this by noting: “If you remember, we drilled in 3a probably the best well we’ve ever drilled — Ruby 1 — which found a wonderful column of hydrocarbons, the biggest I have seen. Then we drilled Ruby 2 next to it, which was a dry hole. So that just tells you the complexity of the area.”

Hence the need to “understand the area much more deeply before we can even look at doing anything else there.”

Mr. Pereira points out that he has “a very capable team working on it, trying to bring things now to a place where we can understand it better, understand what happened with the wells we drilled, understand the geology of the hydrocarbon system at work and then we will see what we can do.”