About 6.2 trillion cubic feet (tcf) of natural gas resources on a risked basis are locked up in small gas pools, mainly in Trinidad and Tobago’s East Coast Marine Area (ECMA), with little or no effort being made to retrieve them.
This is more than twice the amount of gas in the Manatee field in block 6d (2.7 tcf) in the unitised, cross-border arrangement with Venezuela’s Loran discovery in its Plataforma Deltana block 2.
Eventual extraction of Manatee and Loran reserves (7.3 tcf) is being pursued, but significant accumulations elsewhere on the Trinidad and Tobago side of the border have been almost completely neglected so far.
That 6.2 tcf on a risked basis (39.9 tcf unrisked) is sitting in about 151 scattered prospects, mainly in bpTT’s acreage. The size is about 200 billion cubic feet or less.
Like all other gas producers, the company has, up to now, preferred to spend money developing much larger discoveries (usually in the 1 tcf range) simply because it is more economical to do so.
Small gas discoveries do not pass the commercialisation hurdle because “developing them is very costly,” as bpTT’s president, Norman Christie, has often pointed out.
Energy and Energy Affairs Minister Kevin Christian Ramnarine seems sympathetic to this view.
As he told an Energy Chamber luncheon in mid-May, “These small gas deposits, depending on their liquid content and distance from infrastructure, may not justify exploration expenditure.”
But he also accepts that “we cannot ignore those stranded reserves. Poten and Partners has identified this as a key finding of the Natural Gas Master Plan.”
The Minister conceded in that same address to the Energy Chamber that “a separate fiscal regime will be required for the development of these small prospects.”
In other words, only tax incentives will bestir upstream companies to take small pool exploitation seriously.
The government realised earlier that incentives would be useful in encouraging the development of small oil pools and offered a special supplemental petroleum tax (SPT) rate of 25 percent in 2012 for companies to do so.
How successful this has been is not known precisely, as Minister Ramnarine has not reported back on the matter.
But it must have been reasonably successful for him to consider offering a similar fiscal lure for small gas pool development.
The Minister’s position is backed up by that of Gregory Hannays, industry leader, energy, for Ernst and Young Services, who has noted in the past that “incentives for small gas pool development are absolutely needed.”
With Parliament dissolved, it is impossible for Ramnarine to put his small gas pool fiscal incentive into effect, so that inducement will have to wait for the next government, be it the People’s Partnership (PP) or otherwise.
But the very possibility of such relief has caused bpTT, which already produces an average of about 2 billion cubic feet a day (bcfd) from existing larger gas fields, to take another look at the potential for small gas pool development.
bpTT’s vice president for reservoir development, Yatindranath Keith Bally, told EnergyNow that “if you operate under the mantra of leaving no molecule behind, as bpTT does, then you’ve got to figure out a way of going after small gas pools, because when you add all these fields together, the reserves are bound to be big.”
He concedes that “it may require fiscal incentives,” but it also needs the requisite “technology and operating in an innovative manner.”
bpTT, like all other gas producers, also has “left-behind gas” in its larger fields, the recovery of which could also be part of any incentives considered.