Deepwater invictus

A deep water bid round is expected to take place before the end of this year, Energy Minister Franklin Khan has said.

And the prolonged negotiation with bpTT and Shell on the blocks they bid on in last year’s shallow water bid round may soon come to an end, he said.

Khan made the statements yesterday as the results of the annual audit of the non-associated natural gas reserves and resources of Trinidad and Tobago for the year ended 2019 was released.

So far the government has not had a deep water bid since being voted into office in 2015.

Khan said now that BHP has relinquished acreage he feels now would be a better time for the bid round.

“To have a bid round you must have acreage to bid. In terms of the shallow water, most of the shallow water acreage and most of the shallow water prospective acreage are already under license so the real upside potential lies in the deep water but it would have made no sense to come out with a parallel deep water bid round when we were in the throes of a successful deep water programme,” Khan said.

“Now that programme is completed we have now classed the data and we have made an important intervention here we have now agreed with BHP for the declassification of the deep water data so all the seismic and all the well information will now be packaged and added to which BHP will now be relinquishing acreage they do not want because that is part of the PSC (production sharing contract) after the exploration period you have to relinquish acreage that you do not plan to develop,” he said.

“So now we are in a position to have relinquished BHP acreage which in a sense will be geographically close to the discoveries and it will have important information both from its well information and its seismic programme bearing in mind that BHP at the point in time ran the largest deep water seismic survey in the world,” Khan said.

Khan said with the added data the government can now have a deep water bid round.

He, however, stated that deep water is the most expensive part of exploration and production.

“It is not shallow water it is not onshore so it calls for significant capital, all over the world international majors are constrained with capital so possibly now is not the time to go out to the market but having said that we will be in a technically good position to go back out with a deep water bid round in the latter part of this year,” Khan said.

Khan said he believes the bid round will be “quite attractive.”

With respect to the shallow water bid round Khan said it is close to come to an end.

In 2019 a shallow water bid round for new acreage was held.

The bid round, closed with BP and Shell, the two major existing gas producers in T&T jointly bidding on three of the six blocks on offer.

The joint BP and Shell bids were received for the three east coast blocks on offer, with no other bids being received for the blocks. No bids were received for the two blocks off Trinidad’s north coast and for the one block on offer in the Gulf of Paria.

“The shallow water bid round did not offer the most prospective acreage in the world I would be the first to admit. A lot of that acreage was already relinquished acreage from other companies so the geologic potential of that acreage was not as high as some other acreage however when the potential is not high the bid will not be attractive,” Khan said.

“So we are trying to juggle a way to see what Shell and BP bidded and to see if they can possibly meet probably the lowest hurdle that the ministry would assign before we award the acreage. There has been a lot of discussion back and forth, the structure of the contract and other fiscal issues and I know it has taken some time but we are coming very close to the end of that exercise,” he said. (JJ)