The development of the 300 million tonnes of the very heavy oil in south Trinidad known as tar sands may actually become a possibility in due course now that energy and energy industries minister, Nicole Olivierre, has spoken on the matter – the first time any minister has mentioned this for the last five years.
She did so in her feature address to the Trinidad and Tobago Section of the Society of Petroleum Engineers (SPE) conference in mid- June, when she noted that the country had to undertake “sustained monetisation” of all its energy resources, “including tar sands”.
This was, no doubt, music to the ears of mining geologist Herbert (“Billy”) Sukhu, who has been virtually a lone voice in the wilderness on this subject over the years.
Ms. Olivierre’s predecessor, Kevin Ramnarine, never took the idea of tar sands development seriously, probably sensitive to the likely environmental effects of extraction, though Mr. Sukhu insists those effects are exaggerated.
The minister made reference to tar sands as part of a host of activities she intended to undertake in the energy sector (see other story in this issue), so it is not clear how she will prioritise this matter – but having been thrown the bait, Sukhu will almost certainly be biting on it furiously. He does have the government’s investment-promotion firm, investTT, on his side, since it signed a memorandum of understanding (MOU) with his company, Geominex Resources, which says that the agency will “facilitate approval to conduct a full socio-economic and environmental impact assessment in the development of Trinidad and Tobago’s tar sands south of the region of La Brea for the production of crude oil.”
Sukhu firmly believes that as much as 30,000 barrels of crude a day (b/d) could initially result from tar sands development, building up to 60,000 b/d over time. In a situation where crude output from conventional reservoirs is declining, any production boost should be wholeheartedly welcomed. He has currently teamed up with a UK company “to examine their possible role and participation in the integrated development approach.”
Since the cost of extracting tar sands and then turning them into conventional crude for refining is obviously much higher than regular drilling – as done almost every day in the south Trinidad oil patch – an oil price which can cover those costs and return a margin is obviously needed.
Sukhu believes a price “above US$20 a barrel” could be economic. Since the price is currently close to US$50 a barrel, cost should not be a deterrent for tar sands development. His favoured approach, which the minister might find a good guide, is “to implement two 30,000 b/d tar sands projects, ramped up in stages as new facilities are added, resembling a manufacturing production profile similar to the Atlantic LNG project.”
Sukhu has accused “the energy ministry” of being the chief factor in “delaying or preventing the approval of the tar sands project”, by which he means the public servants employed there. This suggests that the minister herself will have to take the lead in this matter.