The Energy Chamber of Trinidad & Tobago warmly welcomes the signing of three deepwater production sharing contracts between the Government of Trinidad & Tobago and a consortium comprised of bp and Shell.
The signing took place at the Hyatt Regency, Port of Spain today September 26th for the production sharing contracts (PSCs) for Blocks 25(a), 25(b) and 27, in the Atlantic Ocean off Trinidad’s east coast.
The Ministry of Energy previously stated that the consortium has been engaged in complex negotiations with the Government over the terms and conditions of the PSCs, which required different and novel considerations due to the nature of the expected exploration and possible future production.
The Energy Chamber recognizes that the future of Trinidad & Tobago’s oil and gas industry rests to a large extent on the exploration and development of resources in deeper waters, a relatively underexplored province which holds significant potential.
In his comments at the signing ceremony the Minister of Energy, Hon. Stuart Young, underscored the importance to the future of the country in maintaining an active upstream sector and continuing to find new resources. He thanked the international operator companies for their continued faith in Trinidad & Tobago and their willingness to go on investing.
The Minister stated that “Our arrival at this point is a testimony to the good faith by all parties and commitment to the future of our country’s energy sector; a significant component of which lies in the deep-water environment.”
“Trinidad and Tobago has the potential to be a significant deep-water player. In this regard, we will continue to collaborate with our worldclass upstream operators to optimize the development of our hydrocarbon province and to provide a competitive fiscal environment that encourages investment”, he added.
Minister Young, during his remarks at the event, also spoke about the importance of remaining competitive in order to attract investment. He also restated some of the recent changes to the country’s fiscal regime in the last budget – which included changes to the supplemental petroleum tax and reductions in petroleum profits tax.
He said, “Through continuous engagement with our upstream companies, the Government will continue to evaluate and determine the additional fiscal incentives required to ensure that Trinidad and Tobago remains an internationally competitive hydrocarbon province.”
By signing the PSCs the Consortium has committed to undertake a minimum exploration work programme for Blocks 25(a), 25(b) and 27 and to meet financial obligations such as administrative charge and minimum payment, training contributions, research and development contributions, technical assistance/equipment bonuses, production bonuses and scholarships. Activity in the respective blocks are programmed to commence within twenty-four months of the effective date of the PSC.
The Minister closed his remarks by saying “The deep water is our new and exciting frontier and I look forward to favourable results in the years to come.”
The Energy Chamber would like to recognize the role played by the Minister of Energy and the Ministry staff in completing the negotiations for these three blocks and for getting the agreements signed. We look forward to the start of the exploration phase for these blocks and hopefully for future developments. The Energy Chamber recognizes the importance of having extremely capable and experienced exploration companies like bp and Shell, both valued members of the Energy Chamber, who are among a handful of companies world-wide with the knowledge, experience and capacity to take on deepwater developments of this nature. The Energy Chamber recognizes the importance of these companies long-term commitment to Trinidad & Tobago and their willingness of continue to invest.