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Chairman of Petrotrin, Professor Andrew Jupiter, indicated that the state oil company has pre-qualified 29 firms for enhanced oil recovery (EOR). Speaking at the Enhancing Oil and Gas Recovery symposium hosted by the Energy Chamber and the University of Trinidad and Tobago, Professor Jupiter revealed the intention to boost oil production by Petrotrin in a number of areas both onshore and offshore.
A number of smaller retail gas stations in Trinidad and Tobago have been forced out of business in recent years. Gas station owners have been especially hard hit by increases in taxation that have significantly increased their costs while, under the law, they are operating on fixed margins. The tax changes that have led to this situation have been the increases of Green Fund and Business Levy which are paid based on gross revenue not profit.
One of the key factors affecting Petrotrin is the margins under which they operate, this according to Petrotrin head, Fitzroy Harewood in May at an energy luncheon held by the Energy Chamber. Harewood provided a frank look at the company’s future given the “lower for longer” price environment. He said that the only way for the model to work is keep the cost of the raw materials down, and maximise the cost of finished products. Fundamental to ensuring the margins at the refinery health he said, is increasing local oil production. Whatever the lifting cost is to bring that crude, represents the cost of production. When we buy crude, we are exposed to market forces.
The average gas selling prices of two major upstream producers in Trinidad & Tobago declined by approximately 35% between 2015 and 2016, with BP reporting average prices of US$1.72 in 2016 and EOG Resources reporting average prices of US$1.88 per mmscf. These figures are taken from the company’s Annual Reports and SEC filings; in the case of BP, the figure quoted is for their South American region, but as Trinidad & Tobago, is their only gas producing asset in the region, the price can be assumed to be the Trinidad & Tobago price.
CEOs of locally operating energy companies signed a Memorandum of Understanding on May 5 to create the Trinidad and Tobago Upstream Operators Group (TTUOG).
It was a disappointing decision not to construct the Angelin platform in La Brea. However, this decision has been driven by the need to ensure that natural gas is available in Trinidad and Tobago by early 2019. There were clear concerns that any interruptions to project delivery, whether due to labour unrest or other factors, would have serious implications for bpTT, the National Gas Company and the downstream processors and users of natural gas. This in turn would have serious implications for the overall national economy.
The highly anticipated Angelin platform, despite its slightly controversial story here in Trinidad, appears to be moving ahead. McDermott, a US-based, provider of integrated engineering, procurement, construction and installation (EPCI) services for offshore and subsea field developments, has announced that they have delivered the pre-FEED (front-end engineering design) designs to BP for the Angelin platform.
A strong safety culture is vital for the continued success and competitiveness of the Trinidad & Tobago energy sector. Every individual working on any energy sector facility has a duty to stop work at any situation that will put themselves or others in harm’s way. Under Trinidad & Tobago’s Occupational Safety and Health Act (OSHA), companies need to have policies in place where workers are informed of their responsibility to stop any unsafe work and systems in place to investigate any “stop work” incidents. This is also one of the requirements that contractors need to demonstrate in order to be certified under the Safe to Work (STOW) programme. At present, there are over 500 certified companies in the country.
The most recent Petrotrin oil spill, beginning on the afternoon of 23rd April 2017, has put a very clear spotlight on the issue of asset integrity. On that afternoon, the base of tank 70 failed and there was a significant release of fuel oil into the environment. Petrotrin was unable to fully contain the fuel oil and over the next 24 to 48 hours, approximately 300 barrels of fuel oil flowed into the sea around the company’s port facilities.
All responsible stakeholders in the country must be disappointed by the decision not to construct the Angelin platform in La Brea. However, this decision has been driven by the need to ensure that natural gas is available in Trinidad & Tobago by early 2019. There are clear concerns that any interruptions to project delivery, whether due to labour unrest or other factors, would have serious implications for bpTT, the National Gas Company and the downstream processors and users of natural gas. This in turn would have serious implications for the overall national economy.
A strong safety culture is vital for the continued success and competitiveness of the Trinidad & Tobago energy sector. Every individual working on any energy sector facility has a duty to stop work in any situation that will put themselves or others in harm’s way. The misuse of this stop work duty by trade unions, as a cover for illegal strike action over pay, is extremely damaging to safety culture and undermines the entire safety management in the sector.
BP has a long history in Egypt and has been helping the country meet its energy needs for more than half a century, investing over $30 billion during that period. They also claim that with its partners, BP provides almost 10% of the country’s oil production and 40% of its gas and noted record investment in major projects in the Nile Delta set to significantly boost the supply of much-needed domestic energy.
BHP has recently moved its North American Petroleum Accounting and Reporting functions from Houston to Port of Spain, Trinidad and Tobago. At first sight, this may not seem a particularly newsworthy event, but the relocation of this important function represents a rare win in Trinidad and Tobago’s national diversification strategy, which has emphasised the development of service exports to complement the traditional export of oil, gas and petrochemicals. By relocating accounting services from Houston to Port of Spain, BHP will be exporting accounting services from Trinidad and Tobago to the USA and other countries in the region.
The signing of the first Local Content Charter took place during the opening ceremony of the Trinidad and Tobago Energy Conference 2017 hosted by the Energy Chamber. This signalled a commitment from the major operator companies in the energy sector to develop and implement local content initiatives that will serve to strengthen the energy services sector.
The Angelin project will be BP’s next major project in Trinidad and Tobago, following on from Juniper. Although Angelin has not yet been officially sanctioned, BP has begun submitting documents to the Environmental Management Authority (EMA) in Trinidad outlining the project development.
Methanol prices are once again climbing. Currently, they are higher than they have been in almost a year. The graph below shows the Methanex non-discounted price (USD), pegging the current price at $416/MT. It has not been at this price since August 2015.
At the Energy Conference, Slattery said that she was very encouraged by the large potential gas resource found at the LeClerc field (in block TTDAA5). She also mentioned that significant gas discoveries in the near term have the potential to hit the market in early to mid-2020’s. This is welcome news for Trinidad and Tobago’s gas-starved LNG and downstream sector.
With the Shell acquisition of BG completed, many people in the energy industry have been curious about Shell’s plans in Trinidad and Tobago. While Shell has had over 100 years’ presence in the country, there has been a lot of speculation about how, and even if, Trinidad and Tobago would feature in Shell’s future.
Globally respected consulting firm Rystad Energy was recently commissioned by the Energy Chamber to conduct a study into the competitiveness of the Trinidad and Tobago gas industry. The study highlights the significant challenges faced by the country’s gas industry, both in terms of international competition (in particular from US shale gas) and the problem of under-investment in upstream gas development, leading to significant shortfalls in production.
LGO has been faced with difficult decisions this past year – the company was even forced to halt salaries to its directors for the past 15 months – but following a recent announcement about the refinancing of its loan facility, the company also said that drilling activity will resume at the Goudron field in Trinidad. The refinancing sees LGO shift lenders, and now that the company is no longer in default, it is now able to pursue a healthy drilling programme in 2017.
