Click here to: register for the workshop - Industry Reality Check: Oil and Gas Reserves

Click here to: register for the workshop - Industry Reality Check: Oil and Gas Reserves

Crude oil production (i.e. non-condensate production) in Trinidad declined from a peak of 229,527 barrels of oil per day in 1972 to an average of 66,784 barrels of oil per day in 2014. Based on a projection of this historical decline, crude oil production in 2020 and 2030 will be in the order of 50,000 barrels of oil per day and 20,000 barrels of oil per day, respectively. 

There are, however, opportunities to arrest this decline in oil production in the short term and increase oil production in the medium to long term. These opportunities cover a wide spectrum with varying degrees of impact on oil production and can be classified as follows: 

(A) Developed Acreage
(1) Maximising production from existing wells; 
(2) Maximising the intensity of development drilling in the existing fields; 
(3) Execution of a major heavy oil initiative; 
(4) Extension exploratory drilling. 

(B) Undeveloped Acreage
(5) Low to medium risk exploratory prospects in traditional oil producing horizons; 
(6) High-risk exploratory prospects. 

(C) Unconventional Opportunities
(7) Shale Oil; 
(8) Tar Sands. 

Of the above opportunities, heavy oil and exploration targeting traditional producing horizons have the best chances of impacting significantly on oil production in the short to medium term. There are in place reserves in the order of 1.5 billion barrels of heavy oil on land in the Morne L’Enfer, Forest and Cruse formations – a 15% to 20% recovery factor would result in recoverable reserves in the order of 225 million to 300 million barrels of oil. Also there are potential low to medium risk recoverable reserves in the order of hundreds of millions of oil from exploratory prospects in the traditional producing horizons of the Pliocene Forest and Cruse Formations in the South-West onshore and Gulf of Paria acreage. Similar onshore opportunities exist with respect to the Mid Miocene Herrera sandstones. 

Although heavy oil and exploration in traditional producing horizons offer the best opportunities to significantly increase oil production, initiatives should also be taken to generate exploratory activity in high risk “frontier” opportunities which include the Cretaceous (“the deeper horizons”), the Mid Miocene Herrera in the onshore south western area and its extension into the Gulf of Paria, shale oil in the area immediately south of the Central Range and its offshore extension and the marine acreage off the south coast. The cumulative potential recoverable reserves of these opportunities are in the order of at least 500 million barrels of oil. 

Unlike exploration, maximising oil production from stripper wells and development drilling would have a relatively small impact on oil production. However, these opportunities are important in arresting the decline and stabilising oil production. It should be noted that oil production in Trinidad is to a major extent stripper well production –it is reasonable to assume that at least 75% of crude oil production in Trinidad comes from stripper wells. It is important therefore to have (as far as is possible) all stripper wells on production and to keep these wells producing for as long as possible. 

In order to expeditiously convert opportunities to oil in the tank, the following are some suggestions for consideration: 

(1) Make changes to the fiscal regime to incentivise heavy oil exploitation, the exploration for small fields and exploratory activity on high risk prospects. Major changes are necessary – tweaking the current fiscal regime is unlikely to make a difference. Major changes in the Supplemental Petroleum Tax should be considered with respect to heavy oil and small fields. With respect to high risk exploration opportunities, a major change in the Petroleum Profit Tax (PPT) similar to the reduction for the deep water exploration (but not necessarily the same quantum) should be considered. Fiscal changes should apply to new oil. 

(2) Revert to the old model with respect to the acreage in the Gulf of Paria, when the State Oil Company was in partnership with companies which brought to the table capital, technology and expertise (management, technical and operational). 

(3) Increase the lease operatorship and farmout programme on land and make the existing thousands of idle wells on land available to the lease operators. 

(4) Make the heavy oil acreage available to appropriate companies in partnership with the State Oil Company. 

(5) As far as is practically possible, apply 3D seismic technology to acreage on land not currently covered by this technology. 

(6) Make the unleased acreage with exploratory potential available to interested companies. 

(7) Determine the potential in the existing oilfields for enhancing oil production by CO2 injection and implement an appropriate CO2 programme. 

(8) Determine whether Tar Sands in Trinidad could be exploited in an environmentally acceptable manner. This determination will decide a “go” or “no go” with respect to Tar Sands in Trinidad. 

The issue of declining oil production should be a matter of national concern – although we do not have a crisis in oil production at present, we are heading there in the not too distant future. The formulation of a master plan for oil and the effective execution of this plan should therefore, be a national priority.