The peo­ple of La Brea have once again lost out on eco­nom­ic ac­tiv­i­ty as Aus­tralian out­fit BHP has de­cid­ed to build its lat­est oil and gas plat­form out­side of T&T.

The com­pa­ny con­firmed that it will not be con­struct­ing the plat­form at La Brea claim­ing that the for­eign bid was more com­pet­i­tive.

In an emailed re­sponse to a num­ber of ques­tions from the Sun­day Busi­ness Guardian the com­pa­ny’s com­mu­ni­ca­tions man­ag­er Judy Dane said a com­pre­hen­sive analy­sis showed that the lo­cal bid was not as com­pet­i­tive as oth­ers they re­ceived.

“As far as the plat­form fab­ri­ca­tion specif­i­cal­ly, sev­er­al lo­cal con­trac­tors were in­vit­ed to sub­mit bids dur­ing the process, on­ly one did. A com­pre­hen­sive analy­sis was done across all and the lo­cal bid was less com­pet­i­tive com­pared to the oth­ers,” Dane stat­ed.

Sources in­di­cate the plat­form is small com­pared to the oth­er huge plat­forms that Tof­co has built in the past for BPTT and that they could have eas­i­ly han­dled the job.

Sun­day Busi­ness has been told that the coun­try can­not build a sus­tain­able plat­form fab­ri­ca­tion in­dus­try if the on­ly com­pa­ny pro­vid­ing work is BPTT.

In fact, BHP has nev­er built a plat­form in T&T and sev­er­al oth­er pro­duc­ers like EOG re­sources have by­passed La Brea.

In the past, the gov­ern­ment has been vo­cif­er­ous about the fail­ure of BPTT to build its plat­form in La Brea fol­low­ing the de­ba­cle when there were work stop­pages and de­lays in its de­liv­ery. This time around there has been si­lence from the Row­ley Ad­min­is­tra­tion.

Mem­ber of Par­lia­ment for La Brea, Nicole Olivierre, said she was dis­ap­point­ed by BHP’s de­ci­sion not to build the plat­form at Tof­co’s fa­cil­i­ty, say­ing it rais­es the ques­tion about the com­pa­ny’s com­mit­ment to lo­cal con­tent.

Olivierre said she was aware that En­er­gy Min­is­ter Franklin Khan had dis­cussed with BHP the gov­ern­ment’s in­ter­est in hav­ing the plat­form built in T&T. She, how­ev­er, ad­mit­ted to not be­ing part of those dis­cus­sions.

Ac­cord­ing to the par­lia­men­tary rep­re­sen­ta­tive for La Brea, the de­ci­sion is a loss for the coun­try and her con­stituents who ben­e­fit from the eco­nom­ic ac­tiv­i­ty gen­er­at­ed by Tof­co.

She said the ex­tent of the loss de­pends on the size of the plat­form, in­clud­ing the base­load and the num­ber of peo­ple who would have been em­ployed.

“Any loss of work to Tof­co will have a neg­a­tive im­pact on the com­mu­ni­ty as the com­pa­ny em­ploys a large num­ber of skilled work­ers and it’s a loss to T&T and tax rev­enues. So you re­al­ly have to ques­tion the com­pa­ny’s com­mit­ment to lo­cal con­tent,” Olivierre added.

Dane in­sist­ed that the Ru­by project will lead to oth­er op­por­tu­ni­ties for lo­cal sup­pli­ers.

“We are is­su­ing EOIs (Ex­pres­sions of In­ter­est) for all goods/ser­vices as­so­ci­at­ed with the Ru­by project lo­cal­ly to max­imise op­por­tu­ni­ties,” Dane stat­ed.

Dane said specif­i­cal­ly BHP plans to award 100 per cent of the Brown­field scope of work lo­cal­ly.

“This rep­re­sents the en­tire­ty of the Brown­field on­shore fab­ri­ca­tion and off­shore in­stal­la­tion scope,” Dane stat­ed.

She in­sist­ed that BHP had or­dered more than $20 mil­lion in equip­ment lo­cal­ly since the project was sanc­tioned and to date spent in ex­cess of $100 mil­lion to lo­cal ven­dors lever­ag­ing lo­cal re­sources or sourc­ing equip­ment in­ter­na­tion­al­ly through lo­cal en­ti­ties.

“For scopes where lo­cal com­pa­nies do not have the ca­pac­i­ty, we ac­tive­ly seek demon­stra­tion that in­ter­na­tion­al com­pa­nies pro­vide lo­cal con­tent ca­pac­i­ties in their pro­pos­als (eg lo­cal main­te­nance re­sources, freight for­ward­ing, cater­ing ser­vices, off­shore lo­gis­tics, con­struc­tion/off­shore labour),” Dane stat­ed.

Dane said the project team is com­mit­ted to con­tin­u­ing to pur­sue these op­por­tu­ni­ties de­scribed as well as seek­ing oth­er op­por­tu­ni­ties to utilise lo­cal ca­pa­bil­i­ties and build lo­cal ca­pa­bil­i­ty with­in the coun­try, for ex­am­ple hir­ing of na­tion­als dur­ing the project to rep­re­sent BHP for scopes such as in­spec­tions, HSE over­sight, con­struc­tion su­per­vi­sion.

BHP builds lo­cal ca­pa­bil­i­ties by ex­plor­ing op­por­tu­ni­ties to up­skill na­tion­als ei­ther di­rect­ly on the project or in­di­rect­ly, Dane stat­ed.

In Au­gust the board of BHP ap­proved its more than $3 bil­li­on Ru­by and Delaware project in T&T.

The com­pa­ny an­nounced the project is ex­pect­ed to add 16,000 bar­rels of oil to T&T’s crude pro­duc­tion, or at cur­rent lev­els in­crease the coun­try’s to­tal pro­duc­tion by 27 per cent.

It not­ed that its con­tri­bu­tion to the project will be $1.92 bil­li­on with the oth­er $1.08 bil­li­on com­ing from state-owned Her­itage Pe­tro­le­um and Na­tion­al Gas Com­pa­ny.

In a re­lease on the com­pa­ny’s web­site it said: “The project has es­ti­mat­ed re­cov­er­able 2C re­sources of 113.2 mil­li­on bar­rels of oil and 274 bil­li­on cu­bic feet of nat­ur­al. First pro­duc­tion is ex­pect­ed in the 2021 cal­en­dar year and is es­ti­mat­ed to in­crease pro­duc­tion by 16,000 bar­rels of oil per day (bop/d) and 80 mil­li­on stan­dard cu­bic feet per day (mm­scf/d) gross at its peak.”

The Ru­by Project is lo­cat­ed in the Block 3(a) de­vel­op­ment area of the North East coast, close to To­co.

“The project con­sists of five pro­duc­tion wells tied back util­is­ing the la­tent ca­pac­i­ty of the ex­ist­ing pro­cess­ing fa­cil­i­ties, proven tech­nol­o­gy of the ex­ist­ing op­er­at­ed as­set, and new­ly ac­quired ocean bot­tom node seis­mic imag­ing.”

BHP pres­i­dent op­er­a­tions pe­tro­le­um Ger­al­dine Slat­tery said: “This is an im­por­tant mile­stone for BHP in T&T. Ru­by aligns well with our strat­e­gy of max­imis­ing val­ue from our ex­ist­ing as­sets, bring­ing com­pet­i­tive near term val­ue and vol­ume growth.”